The buzz is palpable – the iconic Tata Sierra is back in the showrooms in a brand new avatar and with a compelling price tag. As international brokerage house Nomura calls it, its Sierra reborn – where ‘Legacy meets premium’. The big question is, will it turn the fortunes for Tata Motors? This is decidedly the most feature-loaded SUV yet from the Tata stable and how high can it push the share price of Tata Motors? Nomura pegs a monthly sales of 10,000 units on the back of aggressive pricing.
Nomura maintains a Neutral rating on the stock and sets a target price of Rs 395 per share. This implies about 12% upside from current levels. They believe that “the addition of the Sierra to the portfolio could create a meaningful upside to PV growth expectations over FY26-FY28,” for Tata Motors. Nomura estimates FY26 volumes to be around 609,000 vehicles and expects them to jump to 723,000 vehicles by FY28. The monthly run rate, in terms of vehicle sales, is also expected to surge to 60,000 vehicles a month by FY28 from 50,000 a month in FY26.
Nomura on Tata Motors: Sierra, a key driver of PV volumes
Bookings for the model will commence from December 16, 2025 and deliveries will start from January 15, 2026. This latest launch from the Tata Group’s PV manufacturer carries forward the Sierra design into a modern avatar.
It comes loaded with features and delivers a premium in-cabin experience. Nomura highlighted that the “pricing is aggressive, given the base variants are also feature loaded. We expect Sierra’s potential sales to be at 10,000 per month.”
Nomura on Tata Motors: Sierra impact on PV business valuations
So how does that impact the valuations of the PV business, especially in the aftermath of the demerger? Nomura values “the PV business at 1.5x FY28 EV/sales, and JLR at 1.1x FY28 EV/EBITDA.”
The brokerage house is discounting the valuation to December 2027; and value investments at Rs 87/share to arrive at the target price of Rs 395 per share. As per their estimates, the “stock is currently trading at 4.2x FY28 EV/EBITDA.”
Nomura on Tata Motors: Why the Sierra matters
Nomura believes that “With consumers increasingly upgrading to premium models, supported by GST cuts, the Sierra seems well positioned to benefit from this shift.”
The Sierra will be available in three powertrain options – 1.5-liter Kryojet diesel and two new petrol powertrains, a 1.5-liter TGDi Hyperion, and a naturally aspirated 1.5-liter Revotro engine. It will be offered in seven trims.
With 622 liters of storage, Sierra offers one of the highest boot capacities in the segment.Key features of the new Sierra include –
- Horizon view triple-screen setup
- Largest panoramic sunroof within the segment spanning 1525mm x 925mm
- 360-degree camera and level 2 ADAS with 22 features
- HypAR heads up display
- First-in-industry 5G connectivity
- Sonicshaft soundbar and a 12 speaker JBL system
Nomura on Tata Motors: Risks that may impede stock from reaching target price
Nomura highlighted that the “success of Sierra and higher margins can lead to further re-rating upto 2x EV/Sales.” However, they also pointed out the key downside risk – “Weaker JLR margins can keep free cash flow negative over FY27-FY28.”
