Tata Motors Share Price Target at Rs 831: ICICI Securities
Tata Motors share price was up by 1.7 percent during early trades. The stock touched an intraday high at Rs 671 at the time of publication of this report. The stock has taken support from yearly lows at Rs 606 and we can expect positive momentum in case Indian markets remain positive. ICICI Securities has upgraded Tata Motors (TTMT) from "ADD" to "BUY" with a revised target price of Rs. 831, reflecting a 28% upside potential. The research firm cites strong recovery in Jaguar Land Rover (JLR), ongoing expansion in India’s passenger vehicle (PV) and commercial vehicle (CV) segments, and strategic product launches as key growth drivers. Despite short-term EV adoption hurdles and cyclical stress in China, Tata Motors remains well-positioned to navigate challenges with cost controls, an enhanced product portfolio, and increasing market share in key regions. The company's continued focus on debt reduction and capital investments further strengthens its long-term outlook.
Strong Performance in the U.S. and European Markets
JLR’s market resilience: Tata Motors’ luxury vehicle segment, Jaguar Land Rover (JLR), continues to demonstrate strong demand in the U.S. market, with early signs of recovery in Europe.
UK and EU easing regulations: The European Union is relaxing emission norms, potentially alleviating pressure on automakers. The UK is likely to follow, creating a more favorable regulatory environment for JLR.
China’s market concerns: The company classifies the slowdown in China’s EV sector as cyclical rather than structural, signaling that it expects recovery in the near future.
Key Developments in the Passenger Vehicle Segment
New product launches: Tata Motors plans to roll out multiple powertrain options, including Harrier EV, Sierra ICE, and an updated Altroz and Curvv over the coming months.
Expanding service network: The company is shifting its focus from sales expansion to enhancing after-sales services, ensuring better customer satisfaction and higher retention rates.
EV roadmap remains intact: While EV adoption in India is slower than expected, Tata Motors remains committed to electrification and hybrid powertrain strategies, adapting to market demand.
Reviving Commercial Vehicle (CV) Market Share
Targeting Small Commercial Vehicles (SCVs): Tata Motors is revamping its SCV portfolio to recapture lost market share in India.
Focus on efficiency: The company is implementing cost-cutting initiatives while improving productivity and optimizing its supply chain.
Stable demand outlook: While cyclical pressures persist, long-term infrastructure projects and urban mobility trends support the growth trajectory of Tata’s commercial vehicles.
Financial Overview: Key Metrics and Projections
| Financial Metric | FY24A | FY25E | FY26E | FY27E |
|---|---|---|---|---|
| Net Revenue (Rs. Mn) | 4,379,278 | 4,598,649 | 4,944,538 | 5,288,255 |
| EBITDA (Rs. Mn) | 596,101 | 619,368 | 680,454 | 759,608 |
| EBITDA Margin (%) | 13.6 | 13.5 | 13.8 | 14.4 |
| Net Profit (Rs. Mn) | 327,838 | 204,502 | 240,821 | 290,531 |
| P/E Ratio (x) | 6.6 | 10.5 | 8.9 | 7.4 |
Key Technical Levels and Investment Outlook
Support and Resistance Levels:
| Type | Price (Rs.) |
|---|---|
| Immediate Support | 625 |
| Key Resistance | 680 |
| Breakout Target | 750 |
| Long-Term Target | 831 |
Fibonacci Retracement Levels:
| Fibonacci Level | Price (Rs.) |
|---|---|
| 23.6% Retracement | 655 |
| 38.2% Retracement | 690 |
| 50% Retracement | 725 |
| 61.8% Retracement | 760 |
Investment Strategy:
A break above Rs. 680 could confirm an uptrend, leading to Rs. 750 and ultimately Rs. 831.
Stop-loss: Placed at Rs. 625 to manage downside risk.
Momentum indicators: The stock is trading near critical resistance, and a breakout could trigger significant buying interest.
Valuation and Risks
Valuation Highlights:
SOTP-based valuation (Sum-of-the-Parts): Rs. 831 per share, derived from a 11x/2.4x FY27E EV/EBITDA multiple for India/JLR.
Earnings growth: Forecasted 20.6% YoY increase in EPS by FY27 as margins expand.
Key Risks to Outlook:
Weak demand in major markets could impact sales volumes.
Rising input costs and competitive pricing might pressure margins.
Cyclical downturns in the commercial vehicle segment could affect profitability.
Bottomline: Tata Motors Poised for Growth with an Optimistic Outlook
Tata Motors is entering a phase of expansion, driven by new product launches, improving profitability in JLR, and aggressive cost management strategies. Despite short-term industry challenges, the company’s strong fundamentals and robust financial projections make it an attractive long-term investment.
With a target price of Rs. 831, Tata Motors presents a compelling opportunity for investors, particularly if key technical breakouts confirm upside momentum. Investors should closely monitor price action around Rs. 680 and Rs. 750, as these levels will be pivotal in determining future stock movement.
