Tata Motors PV vs CV: A sharp divergence has emerged in brokerage views on Tata Motors’ commercial vehicle and passenger vehicle businesses following their Q1 FY27 earnings. While analysts turned increasingly bullish on Tata Motors Commercial Vehicles (TMCV) amid strong earnings, market share gains and export-led growth prospects, sentiment remained mixed on Tata Motors Passenger Vehicles (TMPV) due to margin pressures in the domestic PV business and continued concerns over Jaguar Land Rover’s (JLR) cash burn and rising debt.
Brokerages including Nuvama and Nomura reiterated or upgraded their ratings on TMCV after the company reported better-than-expected profitability and robust volume growth. In contrast, opinions on TMPV remained divided, with MOSL maintaining a ‘Sell’ rating over profitability concerns, while Nuvama retained a ‘Buy’ rating, citing long-term growth potential driven by new launches, EV expansion and an expected recovery in JLR’s performance.
The brokerage noted that TMCV’s Q1 FY27 profit after tax (PAT) came in at Rs 16 billion, surpassing its estimate of Rs 13.5 billion, driven by higher-than-expected margins and stronger other income. The company also reported 27 per cent year-on-year volume growth to 1,08,000 units during the quarter.
Nuvama has reiterated its Buy rating on TMCV with a target price of Rs 525. The brokerage said it has raised its FY28 EBITDA estimate by 10 per cent, factoring in higher revenue assumptions, primarily driven by exports. It also noted that replacement demand is recovering after two years of deferral, supported by improved affordability following GST cuts and adequate availability of financing.
Nomura has upgraded TMCV to ‘Buy’ from its earlier rating and raised the target price to Rs 554 from Rs 402. The brokerage said Q1 EBITDA came in ahead of estimates, supported by a strong performance across segments, and expects margins to improve further with the benefit of price hikes.
Nuvama on Tata Motors Passenger Vehicles
Nuvama has maintained its ‘Buy’ rating on Tata Motors Passenger Vehicles, while revising its target price to Rs 450 from Rs 470. The brokerage said Q1 FY27 EBITDA performance was mixed, with JLR outperforming estimates and India PV missing expectations. JLR reported EBITDA of £481 million, down 22 per cent YoY, supported by better gross margins. In contrast, India PV EBITDA stood at Rs 7.6 billion, up 74 per cent YoY, but fell short of estimates due to higher staff and other expenses, despite a 66 per cent YoY jump in revenue to Rs 182.9 billion.
Tata Motors CV on Wednesday reported an 8.3 per cent year-on-year rise in standalone profit to Rs 1,528 crore for the first quarter of FY27, up from Rs 1,411 crore a year ago. Revenue rose 23.3 per cent to Rs 19,329 crore from Rs 15,682 crore in the year-ago period.
The company’s EBITDA also rose to Rs 2,176 crore from Rs 1,987 crore in the first quarter last year. However, the EBITDA margin declined to 11.7 per cent from 12.3 per cent, indicating some pressure on profitability amid cost and commodity-related challenges. The company also reported an exceptional loss of Rs 100 crore during the quarter.
Tata Motors PV Q1 results
Tata Motors PV reported its Q1 results for FY27 on Thursday. The Tata company reported revenue increased 9.27 per cent year-on-year (YoY) to 95,799, compared with 87,677 in the corresponding period last year. However, profit declined 80.25 per cent YoY to 775, from 3,924 a year earlier.
EBITDA declined 17 per cent YoY to Rs 6,326 crore from Rs 7,620 crore, while the EBITDA margin stood at 6.6 per cent, compared with 8.7 per cent in the year-ago quarter.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
