Tata Motors Passenger Vehicles: Business outlook, valuation and price targets 

Brokerages have offered contrasting views on Tata Motors Passenger Vehicles post Q1 earnings, with Motilal Oswal maintaining a bearish stance on the stock despite a stronger-than-expected first quarter performance at Jaguar Land Rover (JLR), while Nuvama remains positive on the company’s India passenger vehicle business and long-term growth prospects.

Motilal Oswal said Tata Motors’ upcoming product cycle remains robust, starting with the Range Rover Electric launch in September 2026, followed by the Range Rover Sport Electric, Range Rover GT and Jaguar Type 01.

JLR has retained its target of delivering double-digit revenue growth over the next five years. The strategy is focused on increasing propulsion flexibility, strengthening its premium positioning and sharpening its focus on the North American market.

The brokerage noted that JLR expects the shift towards higher electric vehicle sales to be margin-neutral or potentially margin-accretive. New EMA-based smaller vehicles are expected to replace ageing models that currently generate relatively lower margins, which could support overall profitability.

JLR has also retained its FY27 guidance despite a weaker-than-expected first quarter. However, the management acknowledged that the pace of execution will need to accelerate during the rest of the year to make up for the shortfall in the June quarter.

India PV business outlook

The brokerage expects Tata Motors’ India passenger vehicle business to grow at a high double-digit rate in FY27, roughly twice the pace of overall industry growth. Exports from the India business are also expected to double in FY27 as the company expands its international footprint.

Despite expectations of higher input costs in the second quarter, the brokerage expects India PV margins to remain broadly stable sequentially.

Following the better-than-expected JLR performance in the first quarter, Motilal Oswal raised its FY27 EPS estimate by 12%. However, it has not made any material changes to its FY28 estimates, citing several headwinds ahead.

The brokerage said Tata Motors’ India PV business has continued to gain market share, but profitability remains under pressure because of an adverse product mix and rising input costs. JLR, meanwhile, continues to face challenges on both the demand and cost fronts. While the luxury automaker has initiated a major cost-reduction programme, Motilal Oswal expects it to only partially offset the prevailing pressures.

Against this backdrop, Motilal Oswal reiterated its ‘Sell’ rating on Tata Motors with a **sum-of-the-parts (SoTP) target price of ?310 per share**, based on FY28 estimates. It values JLR and the India PV business at 2x and 13x EV/EBITDA, respectively.

Nuvama remains bullish

Nuvama, in contrast, expects Tata Motors’ India PV revenue to grow at a 23% CAGR between FY26 and FY28, driven by new launches and healthy demand.

The brokerage highlighted Tata Motors’ plan to expand its passenger vehicle portfolio to 15 nameplates by FY30, including seven new products. These are expected to include the Sierra, Avinya range, two new internal combustion engine models and two new EVs. Two new nameplates are expected to be launched in FY27.

Media reports have also indicated that upcoming launches could include the Safari EV, Avinya EV and Scarlet ICE.

Nuvama expects India PV EBITDA to grow at a significantly faster **41% CAGR over FY26–28**, supported by higher volumes, improved product mix, PLI incentives and cost savings.

The brokerage is also building in strong growth at JLR, with revenue and EBITDA expected to grow at CAGRs of 14% and 52%, respectively, over FY26–28.

Nuvama retained its ‘Buy’ rating on Tata Motors but lowered its SoTP-based target price to Rs 450 from Rs 470. The valuation is based on 11x EV/EBITDA for the India PV business and 2x for JLR, along with a value of investments of Rs 60 per share. At the current valuation, Nuvama estimates Tata Motors trades at 4.7x FY27E and 3x FY28E EV/EBITDA.