Tata Motors Q2 Results Review - Incremental Headwinds Emerge For JLR: Motilal Oswal

While there is no doubt that the company delivered a robust performance across its key segments in FY24, there are clear headwinds ahead that could hurt its performance, says the brokerage.

Tilt up image of a Tata Motors showroom signage (Photo: Usha Kunji/NDTV Profit)

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Tata Motors Ltd. reported a weak consolidated performance in Q2 FY25, with margins contracting ~150 bp YoY to 11.6% (estimate: 13.2%). This was mainly due to weaker volumes and high cost pressures for Jaguar LandRover, while India business remained resilient despite weak demand.

While management has maintained its guidance for JLR despite several headwinds, we believe margin pressure is likely to persist for JLR over FY24- 27E, given weak demand, rising discounts and normalizing mix.

Even in India, both commercial vehicle and PV businesses are seeing moderation in demand. We have lowered our Ebitda estimates for Tata Motors by 3%/7% for FY25/FY26 to factor in weakness in JLR business. The stock trades at 15 times FY25E/FY26E consolidated earnings per share and 6.5x/5.5x EV/Ebitda. Reiterate Neutral with Sep’26E SOTP-based target price of Rs 840.

Click on the attachment to read the full report:

Motilal Oswal Tata Motors Q2FY25 Results Review.pdf
Read Document

Also Read: SBI, Tata Motors, Ashok Leyland, Oil India, Gujarat Gas, Aarti Industries Q2 Results Review: HDFC Securities

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. 

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

lock-gif
To continue reading this story
Subscribe to Unlock & Enjoy your
Subscriber-Only benefits
Still Not convinced ?  Know More
Watch LIVE TV , Get Stock Market Updates, Top Business , IPO and Latest News on NDTV Profit.
GET REGULAR UPDATES