Tata Motors Maruti Suzuki Q3 results shares: Brokerages bullish on Maruti Suzuki, while Tata Motors get cautious outlook
Brokerages cheered Maruti Suzuki India (MSIL), while issuing cautious calls on Tata Motors following their Q3 performances. MSIL posted a 16 per cent jump in its consolidated net profit for the December 2024 quarter at ₹3,727 crore, driven by higher sales, while the decline in revenue from its passenger and commercial vehicle divisions dragged Tata Motors’ profit by 22 per cent to ₹5,578 crore during the period under review.
Shares of Tata Motors closed as the major laggard among Nifty 50 pack on Thursday, 6.98 per cent lower at ₹699.95, after hitting a low of ₹683.20 in early trade. MSIL shares ended flat on the NSE at ₹12,005.
Analysts foresee MSIL to benefit from multiple launch tailwinds, along EVs and exports growth, while Tata Motors faces a weaker growth outlook across its segments, leading to divergent calls.
JM Financial has given the highest target price on MSIL at ₹15,100 from ₹15,250 earlier. The brokerage expects richer portfolio mix and higher operating leverage to support margins, going ahead. CNG, UVs would drive the demand momentum in the near term, while exports remain one of the key growth pillars, it said. It added that the company is well-positioned to cater to changing customer preferences with its tech-agnostic approach.
Global brokerage Jefferies has downgraded Tata Motors, assigning underperform rating at a target price of ₹660.
Morgan Stanley has assigned an overweight call on MSIL at a target price of ₹14,942, while maintaining ‘equal weight’ on Tata Motors at ₹853.
Domestic brokerages
Domestic brokerage Emkay Global has the highest target price on Tata Motors unchanged at ₹950 with a buy call. The brokerage expects commercial vehicles (CV) momentum to improve albeit gradually, amid slower-than-expected pick-up in government infra/capex spends.
Nuvama Institutional Equities has retained reduce rating on Tata Motors at a target price of ₹720 from ₹750 earlier, emphasising that the company posted a 15 per cent year-on-year dip in Q3, lagging estimates due to a realisation/ margin miss in JLR and the domestic CV division.
Nuvama retained buy on MSIL at an unchanged target price of ₹13,900. The brokerage stated that improving passenger vehicles (PVs) penetration, new products and recovery in demand for hatchbacks are likely to support the automaker’s sales growth over FY24-31E. “The launch of e-Vitara model and a gradual recovery in hatchback demand should catalyse volumes ahead,” it added.
Motilal Oswal has reiterated neutral call on Tata Motors at a target price of ₹755. It expects margin pressure to persist at Jaguar Land Rover (JLR) over FY24-27E, given weak demand in key regions, rising cost pressure as it invests in demand generation, and EV ramp-up, which is likely to be margin-dilutive. Goldman Sachs has also maintained a neutral call at a target price of ₹800. In contrast, CLSA has an outperform rating at a target price of ₹930, while UBS has a sell rating at a target price of ₹760.
Motilal Oswal has reiterated buy on MSIL at a target price of ₹14,500, anticipating multiple launch tailwinds such as EVs, hybrid variants and an SUV. Elara Capital has reiterated accumulate at an increased target price of ₹14,382 from ₹13,368 earlier.
HDFC Securities Research has maintained buy call on MSIL at a target price of ₹14,750, stating that the Q3 margin missed its estimate of 12.3 per cent due to higher expenses on sales promotions, Dzire’s advertising, and campaigns around e-Vitara.
For Tata Motors, HDFC Securities emphasised that the JLR business continues to be impacted by a challenging global macro environment (especially in China), continued higher discounting, elevated variable marketing expenses (VME), increased warranty costs, higher consumer acceptance risk for the upcoming revamped Jaguar portfolio, and a slowdown in EV sales globally, which could lead to mistimed EV launches for the company. The brokerage has maintained reduce rating at a target price of ₹718.
