The share price of Tata Motors Passenger Vehicles (TMPV) has seen sharp price action after Jaguar Land Rover (JLR) laid out its growth roadmap at its latest analyst and investor meet.
Following this, two brokerage houses – Nuvama and Nomura came away with a broadly constructive view on JLR’s long-term strategy.
Nuvama believes the combination of new vehicle launches, cost savings and a stronger North America strategy could unlock over 30% upside in Tata Motors. Nomura, however, remains more cautious, arguing that near-term earnings risks at JLR continue to limit upside despite the company’s long-term opportunities.
Let’s take a look at what both brokerages are saying –
Tata Motors: Brokerages ratings
| Brokerage | Rating | Target Price | Implied Upside |
| Nuvama | Buy | Rs 470 | 30.2% |
| Nomura | Neutral | Rs 373 | 3.3% |
#Nuvama remains bullish on Tata Motors
According to the Nuvama report, JLR has provided a growth roadmap that supports Nuvama’s positive stance on Tata Motors.
– Strong FY27 guidance
The company expects revenue to rise to GBP 26 billion in FY27 from GBP 23 billion in FY26. Management has guided for an Earnings Before Interest and Tax (EBIT) margin of around 4% and free cash flow break-even during the year.
Nuvama said, “We retain ‘Buy’ with a SoTP target price of Rs 470/share (unchanged).”
The brokerage believes the recovery is likely to be driven by volume normalisation after the cyber disruption, increasing contribution from North America and a stronger product cycle.
– Five major launches lined up
One of the biggest positives highlighted by Nuvama is JLR’s upcoming launch pipeline.
Nuvama report added that the five new vehicles are scheduled to be introduced over the next 18 months. These include the electric Range Rover, electric Range Rover Sport, two products built on the Electrified Modular Architecture platform and the all-electric Jaguar Type 01.
Nuvama noted that FY27 will witness a particularly aggressive launch schedule, which could support both volumes and profitability.
– North America becomes a key growth market
Another important takeaway from the analyst meet was JLR’s increasing focus on North America.
As per the brokerage house report, JLR plans to expand its presence through targeted marketing efforts, customer experience initiatives and product portfolio optimisation.
The report also highlighted the recently announced collaboration with Stellantis, which is expected to help develop future Defender-branded vehicles for the US market.
Nuvama noted that management expects North America to eventually become as large as JLR’s current global business.
– Cost savings expected to support earnings
The brokerage also pointed to management’s commitment to improve profitability through cost reduction.
JLR has reiterated its target of generating GBP1.7 billion in cost savings over the next two years.
The savings are expected to come from manufacturing efficiencies, supply chain optimisation, warranty cost reductions and operational improvements.
As a result, Nuvama expects JLR’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) to grow significantly over the next few years.
Why Nomura remains cautious
While Nomura acknowledged the long-term opportunities. The brokerage house believes the near-term outlook remains challenging.
– FY27 guidance below expectations
Nomura noted in its report that the JLR’s FY27 guidance came in slightly below its estimates.
Nomura noted, “JLR expects FY27E revenue at GBP 26 billion (Nom: GBP 26.8 billion), and EBIT margin at 4.0% (Nom: 4.4%).”
The brokerage also highlighted that management expects only free cash flow break-even in FY27, compared with its own estimate of a positive GBP 622 million.
– Growth plans come with higher costs
Nomura pointed out that JLR is simultaneously launching multiple vehicle architectures while supporting several engine technologies. These include mild hybrid, hybrid, plug-in hybrid and battery electric vehicles.
As per the report, this increases operational complexity and investment requirements.
The report stated that management itself acknowledged that greater flexibility comes with an “investment premium.”
– Launch pipeline remains a positive
Despite its cautious stance, Nomura sees merit in JLR’s upcoming launches.
The brokerage highlighted that the company plans to launch:
- Electric Range Rover
- Jaguar Type 01
- Electric Range Rover Sport
- Two Electrified Modular Architecture-based products
Nomura noted, “Five new launches in the next 18 months.”
The brokerage also highlighted encouraging early customer interest, with the electric Range Rover reportedly receiving around 78,000 expressions of interest and Jaguar Type 01 attracting around 46,000 expressions of interest.
What both brokerages agree on
Although their ratings differ, both brokerages broadly agree on several themes involving Tata Motors PV’s future growth projections. .
According to both reports, North America is becoming increasingly important for JLR’s future growth strategy. Both also highlighted the significance of the five upcoming vehicle launches and the GBP 1.7 billion cost-saving programme.
Nuvama believes these initiatives can drive a meaningful earnings recovery and valuation re-rating, while Nomura believes investors may need to wait longer before these benefits become visible in financial performance.
What investors need to watch
For Tata Motors investors, the focus will now shift to the execution of JLR’s product launch pipeline, progress in North America and delivery of the promised cost savings.
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