Tata Motors share price today: tanks 9% post Q3 results, Jefferies downgrade

Shares of Tata Motors slumped 9 per cent in early trade on Thursday on recording a 22 per cent decline in consolidated net profit to ₹5,578 crore in the third quarter ended December 2024, due to a dip in revenue from its passenger and commercial vehicles divisions.

Brokerages have taken a bearish stance on the stock as the growth outlook across segments looks weak. Global brokerage Jefferies has downgraded the stock with an underperform rating, slicing the target price heavily to ₹660 per share.

Morgan Stanley, maintaining equal weight call, has lowered the target price from ₹920 to ₹853.

Another global brokerage Goldman Sachs has maintained a neutral call at a target price of ₹800, while UBS has a sell rating at a target price of ₹760.

Domestic brokerage Motilal Oswal has reiterated neutral call on the stock at a target price of ₹755. The brokerage 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. “Even in India, both CV and PV businesses are seeing a moderation in demand,” it added.

Nuvama Institutional Equities has retained reduce rating at a slashed target price of ₹720 from ₹750 earlier. The brokerage cited that the company posted a 15 per cent y-o-y dip in Q3FY25, lagging estimates due to a realisation/ margin miss in JLR and the India commercial vehicle (CV) division.

Nuvama further expects the domestic CV division to turn in a muted performance owing to moderate road construction expenditure and a high base. “This weakness in demand outlook should also increase costs led by greater marketing and sales promotion spends in global and domestic markets,” it added.

HDFC Securities Research 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. On the CV segment, it is optimistic that growth will being driven by the expected pick-up in infrastructure and construction activities in FY26.

For the PV division, the analysts stated that an ageing portfolio and recent launches by competition could lead to the company’s underperformance. The brokerage has maintained reduce rating at a target price of ₹718.

However, in contrast, CLSA has maintained outperform call at a target price of ₹930. 

Tata Motors stock traded as the top losers of Nifty 50 pack at ₹705 on the NSE as at 10.26 am, lower by 6.31 per cent, after hitting a low of ₹683.20 in early trade.