Tata Motors Shares: Shares of Tata Motors fell 7% following the downgrade after the company’s fourth quarter results. Should you buy, sell or hold?
Nomura downgraded Tata Motors to neutral from buy while also saying JLR may face demand risks and growth in commercial vehicles will also slow. However, the target stock price was raised from 1,057 won to 1,141 won due to steady performance and fair stock price.
Similarly, Morgan Stanley also downgraded Tata Motors from overweight to equal weight but raised its target price from Rs 1,013 to Rs 1,100. It said a sharp EV pickup-led turnaround in FY25 would be a key upside risk to track.
Citi suspended its rating on Tata Motors, saying its outlook is cautiously optimistic.
Motilal Oswal has lowered its EPS estimates by 3%/5% for FY25/FY26, saying the Tata company faces clear headwinds that could dampen its performance in FY25. “We expect JLR margins to remain stable over FY24-26. We expect margins to remain diluted due to demand generation, normalization of mix and investment in EV expansion, reflecting flat demand in both our CV and PV businesses. over the forecast period,” Motilal said. The brokerage has a Neutral rating on the stock with a reduced target price of Rs 955. However, Kotak Equities has an additional rating on the auto stock with a target price of Rs 1,100.”Overall, FY2025-26E performance is expected to be driven by Kotak’s “improved mix and cost management measures, increased market share in PV and CV segments, net to 2025 “We will remain healthy based on the consistent performance of JLR’s business, supported by an improved cash balance sheet,” he said.
In the March quarter, Tata Motors reported a consolidated net profit of Rs 17,529 crore for the quarter ended March 31, 2024, a 46 per cent increase over the net profit of Rs 12,033 crore reported by the company in the previous year.
Tata Motors said in its guidance that it is cautiously optimistic about domestic demand for the full year and expects H1 to be relatively weak. Demand in the premium luxury segment is likely to remain resilient despite renewed concerns about overall demand, the company statement said. This was to ensure a strong performance in FY25.
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