Tata Motors Q1 Review - Strong Performance Under JLR, India CVs; India PV Margin Disappoints: ICICI Securities

ICICI Securities Report

Tata Motors Ltd.'s consolidated Q1 FY25 Ebitda, at Rs 158 billion, beat consensus’ Rs 152 billion estimate. Jaguar Land Rover reported Ebitdam at 15.5%, down 40 basis points QoQ. With JLR’s volume growth set to stabilise at ~5%, Ebitm stabilising at ~8–9% and capex moving up to £3.5 billion, we believe in FY25–26E, it would be tough for JLR to surpass the £2.3 billion free cash flow achieved in FY24.

For Tata Motors’ India business, with commercial vehicles set to remain flat and passenger vehicles growing in single-digits, we believe, the key driver of Ebitda growth would be improving margins in the EV business.

Downgrade to Sell, from Reduce, with a SoTP-based revised target price of Rs 923 (earlier Rs 915) implying 12.4 times/2.6 ties FY26E India/JLR enterprise value/Ebitda.

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