Why are Tata Motors PV shares up 7% despite weak YoY results? Explained
Sarthak Kumar
Tata Motors shares gained in early trade on Friday after investors reacted positively to a better-than-expected performance from Jaguar Land Rover (JLR) and steady growth in the company’s passenger vehicle business.
The stock was trading over 6% higher at ₹360.35 in morning trade after the company reported its quarterly updates.
Tata Motors’ passenger vehicle business reported revenue growth of 43.3% year-on-year at ₹18,598 crore, compared to ₹12,977 crore in the year-ago period. EBITDA for the segment rose 29.3% to ₹1,059 crore from ₹819 crore a year earlier. However, EBITDA margin moderated to 5.7% from 6.3% in the corresponding quarter last year.
Meanwhile, JLR reported Q4 revenue of £6.9 billion, down 11.1% year-on-year. Despite the decline in revenue, the luxury vehicle business delivered margins above analyst expectations, helping improve investor sentiment around the stock.
Brokerage firm CLSA maintained its “outperform” rating on Tata Motors with a target price of ₹468 per share, implying a potential upside of around 38% from the previous closing price.
According to CLSA, JLR’s EBIT margin came in at 9.2% as production normalised. The brokerage highlighted that JLR delivered on its EBIT margin and free cash flow guidance for FY26, while also maintaining its planned investment outlay of £3.6 billion.
CLSA further noted that multiple upcoming launches, especially in the electric vehicle segment, along with ongoing cost reduction measures, are expected to support stronger growth and profitability for JLR. The brokerage also said the company expects to reduce its free cash flow breakeven volume to 3 lakh units during the current year.
Analysts believe the combination of improving operational stability at JLR and continued domestic passenger vehicle momentum could help strengthen earnings visibility for Tata Motors over the coming quarters.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.