Tata Motors Q3 earnings: Brokerages turn bearish, trim price targets 

Tata Motors reported earnings for the December 2024 quarter, which missed estimates. This prompted global brokerage firm Jefferies to downgraded Tata Motors stock to "underperform" from its earlier rating of "buy".  The brokerage also sharply reduced its price target to Rs 660 from Rs 930 earlier.

Its UK arm JLR faces weak demand in China and Europe, along with a rise in customer acquisition costs and higher warranty expenses, Jefferies said adding the Tata Group firm faces a slowdown in demand for both commercial and passenger vehicles. Rising competition in the electric vehicles space act is also a risk for its EV business. 

Q3 profit slipped 22% YoY to Rs 5,451 crore. A sharp slowdown in its luxury Jaguar-Land Rover business, fall in margins and a cautious demand outlook for key markets like China affected Q3 performance of the  Indian carmaker. 

However, revenue from operations climbed 3% YoY to Rs 1.13 lakh crore. Consolidated EBITDA during the third quarter came in at Rs 15,500 crore, 

Brokerage Nuvama Institutional Equities also trimmed its price target by 4 percent to Rs 720 and retained its 'reduce' call on Tata Motors.

Nuvama reduced its FY25 EBITDA target for Tata Motors by 4 percent. "We are building in a muted revenue and EBITDA CAGR of 2 percent each over FY25–27. For JLR, we expect volume contraction due to order book exhaustion, discontinuation of ‘Jaguar’ models and subdued demand across regions," Nuvama said.

The firm sees Tata Motors' India commercial vehicle (CV) division to turn in a muted performance (1 percen CAGR) owing to moderate road construction spends and a high base. 

Morgan Stanley retained its 'equal-weight' call on the stock with a price target of Rs 853. The brokerage cited with Tata Motors' reduced FY25 revenue and RoCE (return on capital employed) guidance for JLR. It said Q3 numbers were weaker than expected. 

Brokerage UBS has a "sell" call on Tata Motors with a price target of Rs 760.

UBS said the company's commentary for the fourth quarter is ambitious amid an uncertain financial year 2026 and 2027. China recovery is the key for JLR to deliver 10% EBIT margin in the next financial year.