Tata Motors is in the spotlight after posting a sharp drop in first-quarter earnings. Two leading brokerages Nuvama and Motilal Oswal have taken a cautious stance on the stock.
The company’s consolidated net profit for Q1 stood at Rs 3,924 crore, down a steep 63% from Rs 10,514 crore last year. Let’s take a look at what the brokerage say about the stock and the rationale behind it –
Nuvama cuts target price, Maintains ‘Reduce’ call
The brokerage firm Nuvama has given a Reduce rating to Tata Motors, cutting its target price to Rs 610 from the earlier Rs 670.
According to Nuvama’s report, the Q1FY26 EBITDA came in at Rs 97.2 billion, a 35% year-on-year decline, largely driven by a 46% drop in Jaguar Land Rover’s (JLR) earnings. The fall was attributed to weak volumes, US tariffs, and forex losses. The India passenger vehicle (PV) business also saw a 36% YoY EBITDA drop due to lower sales, higher discounts, and a shift towards new models.
“We are building in a moderate 5% revenue CAGR over FY25–28E owing to muted volume growth at JLR (1% CAGR) and in India CV (1% CAGR),” the brokerage noted.
Nuvama also flagged multiple challenges such as discontinuation of Jaguar models, market share loss in China, US tariffs, and rising competition from railways in the commercial vehicle (CV) space. It now expects only 4% EBITDA CAGR over FY25–28E and has slashed the target price to Rs 610 from Rs 670.
Motilal Oswal stays Neutral amid global headwinds
Another brokerage, Motilal Oswal, has maintained a Neutral rating on the stock with a target price of Rs 631.
Motilal Oswal echoed a similar sentiment, citing several risks for JLR, including tariff-led uncertainty for US exports, soft demand in Europe and China, and higher costs from warranties, emissions, and incentives (VME).
“Given these factors, management has refrained from giving any guidance for FY26 and beyond,” the report stated.
In India, both CV and PV segments are seeing demand moderation. While CV volumes are expected to post single-digit growth in Q2, the festive season will be key for any meaningful recovery. For passenger vehicles, the company foresees low single-digit growth in FY26, but retail demand has been flat so far, with a 3% decline over the past two months.
Motilal Oswal has maintained a Neutral rating with a June 2027 SOTP-based target price of Rs 631.
Nomura on Tata Motors: Maintain Neutral rating, cut target
Nomura too maintains Neutral rating on Tata Motors. They have however, cut the target price to Rs 704 per share from Rs 799 per share earlier. The Japanese brokerage house has lowered its CV valuations for Tata Motors to “10x EV/EBITDA (from 11x ) given cashflows will be used to fund Iveco acquisition. We also lower PV valuation to 1x EV/salesVs 1.2x earlier) given weaker margin performance.” Even on the JLR valuation front, Nomura has lowered it to “1.1x EV-EBITDA given demand risks. We roll forward valuation to average FY27-FY28 from June, 2026. We value investments at Rs 107/share.
According to them, “the stock is currently trading at 4.6x FY27F EV/EBITDA, which we believe is undemanding, but is fair considering the risks.” The key upside risk as per them, “demand recovery for JLR and the success of new PV models like Sierra.”
However, Nomura also listed out that the “tariff risks impacting demand across global markets for JLR and affecting the consumer sentiment in India,” is a key downside risk.
Tata Motors share price performance
Tata Motors shares have slipped 3.6% in the past five sessions. Over the past month, they gained 7%, but the six-month performance remains negative at -7%. On a yearly basis, the stock has tumbled 41%.
So far in 2025, Tata Motors shares are down 16%, with a current market capitalisation of Rs 2.33 lakh crore. The stock’s 52-week high is Rs 1,142, and its 52-week low is Rs 535.75.