Neutral Tata Motors; target of Rs 690: Motilal Oswal

Motilal Oswal's research report on Tata Motors

We attended Tata Motors’ (TTMT) analyst meet for India business. TTMT expects CV industry volumes to grow at a slower CAGR of 3-5% over the next five years relative to average freight demand CAGR of 5-7% due to the impact of dedicated freight corridors (DFCs). In the long run, TTMT aims to have resilient margins and healthy returns across CV cycles. For FY27, TTMT aims to achieve 40% share in CVs and deliver EBITDA margin in teens with high RoCE. In PVs, TTMT targets to outperform industry growth in FY26 on the back of its new launches. With new product launches, the company expects to achieve 16% market share by FY27 in PVs and 18-20% in the next 2-3 years. TTMT targets to deliver double-digit EBITDA margin in overall PVs by FY27. While it has set an ambitious target for both domestic CV and PV businesses, execution is the key monitorable given the weak demand environment and rising cost pressure.

Outlook

We refrain from changing our estimates at this stage. Further, JLR continues to face multiple headwinds due to the tariff-led uncertainty in its key markets. As a result, management has refrained from giving any guidance for FY26 and beyond. For the lack of any triggers, we reiterate Neutral with FY27E SOTPbased TP of INR690.

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