Buy Tata Motors; target of Rs 743: KR Choksey

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26 Aug, 2025 12:21

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KR Choksey's research report on Tata Motors

TTMT’s consolidated revenue for Q1FY24 was INR 10,22,361 mn, a growth of 42.1% YoY but a decline of 3.5% QoQ. EBITDA for the quarter was INR 1,35,595 mn, which is a growth of 326.3% YoY/ 6.0% QoQ. EBITDA margin expanded by 884 bps YoY/ 118 bps QoQ to 13.3%. As per the company’s definition, consolidated EBITDA margin improved by 700 bps YoY, JLR EBITDA margins improved by 960 bps YoY, TML-CV EBITDA margin improved by 390 bps YoY while TML-PV EBITDA margin contracted by 80 bps YoY. PAT was INR 32,028 mn, a growth of 164.0% YoY from a loss of INR 50,066 mn reported in Q1FY23, and a decline of 40.8% QoQ.

Outlook

We expect the company will grow at a CAGR of 17.5%/ 40.1% in revenues/EBITDA over FY23-25E. We value the JLR & Chery-JLR JV businesses at 2.4x EV/EBITDA, TML-CV at 13.0x EV/EBITDA, and TML-PV business at 14.5x EV/EBITDA, and a value of INR 40 per share for stake in Tata Technologies and arrive at a target price of INR 743 per share (from INR 615 earlier), implying an upside of 15.4%. Accordingly, we maintain our “BUY” rating on the shares of Tata Motors.

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Tata Motors - 01 -08 - 2023 - kr