Nuvama Institutional Equities maintained its ‘Reduce’ call on Tata Motors as it sees a subdued commercial vehicle (CV) environment in India. Plus, it is believed that Jaguar and Land Rover sales will moderate ahead due to challenging demand conditions in the US and China markets. It sees a 6.7% downside in the stock with a target price of Rs 670.
Nuvama on Tata Motors: Subdued revenue growth over next two years
The brokerage house Nuvama expects a 3% revenue compounded growth rate over the next two years. This subdued estimate is based on a volume decrease in JLR and muted growth in India’s commercial vehicle market. In JLR, discontinuance of ‘Jaguar’ models, loss of market share in the China region, and imposition of tariffs in the US region, shall lead to a volume contraction ahead.
“We reckon a muted performance in the India CV division owing to reasonable utilisation levels with transporters, increasing competition from Railways and a high base,” said Nuvama in a research note.
Nuvama on Tata Motors: CV growth likely to be single digit
Tata Motors’ management is expecting single-digit growth in CVs in FY26. The management indicated that the CV industry is expected to grow at a modest 3– 5% between FY25 – FY30.
End-user segments, pickup in execution of infra projects, and demand for buses are expected to help the auto major take the domestic CV share to 40% in FY27 from 36% in FY25. Launches, increased customer focus with better total cost of ownership/value-added services and recovery in small commercial vehicles (SCV) share are likely to help pick up by FY27.
As of FY25, the company’s SCV share stands at 29% and is targeted to improve on the back of ACE Pro launch, intra model repositioning and providing better finance access to first-time/rental customers.
Talking about exports, they are likely to clock double-digit growth led by improving penetration in markets such as North Africa, ASEAN, Latin America, and Eastern Europe.
Tata Motors Q4 results
The company posted a fall of 51% year-on-year in its consolidated net profit at Rs 8,470 crore in Q4 FY25. Its revenue from operations came in flat at Rs 1.19 lakh crore in the fourth quarter of FY25. Also, the board recommended a final dividend of Rs 6 per share, subject to approval by the shareholders.
Tata Motors stock performance
The share price of Tata Motors has declined 10% in the past six months. It has erased investors’ wealth by 26% in the last one year.