Neutral Tata Motors; target of Rs 990: Motilal Oswal

Motilal Oswal's research report on Tata Motors

JLR wholesale volumes (excluding China JV) declined 10% YoY (-11% QoQ) to 87.3k units. The breakup between Jaguar and LR has not been shared in the press release. The production of Jaguar Land Rover (JLR) was restricted to 86k units (-7% YoY), mainly due to supply disruptions from high-grade aluminum suppliers, which affected multiple OEMs. Additionally, a temporary hold was placed on 6.5k vehicles at the end of September, primarily in the UK and Europe, to facilitate additional quality control checks. These vehicles are set to be sold in the second half of the year. The overall mix of the most profitable RR/RR Sport and Defender models stood at 67% of the total wholesale volumes. JLR expects a strong pickup of both production and wholesale volumes in H2FY25 as the aluminum supply situation normalizes.

Outlook

While there is no doubt that TTMT delivered an extremely robust performance across its key segments in FY24, the above mentioned headwinds could hurt its performance going forward. The stock trades at 16x/13x FY25E/FY26E consolidated EPS and 6x/5x EV/EBITDA. We reiterate Neutral with our June’26E SOTP-based TP of INR990.