Shares of Tata Motors Passenger Vehicles Ltd. will be reacting to their September quarter results on Monday, November 16. The numbers were reported after market closing hours on Friday, which showed another quarter of losses for the company, due to multiple one-offs.
Brokerage firm Motilal Oswal has maintained its “sell” rating on Tata Motors PV after its results, and has also cut its earnings estimates for the stock, along with its price target, which has been lowered to ₹240, implying a downside potential of 16% from Friday’s closing levels.
Shares of Tata Motors PV have already corrected 22% so far this year.
Motilal Oswal has slashed its Earnings Per Share (EPS) estimates for Tata Motors PV by 69% for financial year 2027 and by 5% for financial year 2028, citing the multiple headwinds to Jaguar Land Rover (JLR) due to continued pressure from VME costs, commodity prices, persistent softness in Chinese demand, higher interest costs as a result of increased debt, and a downward revision to its full year margin guidance. This, coupled with a raw material inflation impact to the India business, is likely to keep these margins under pressure as well, the brokerage wrote in its note.
While JLR has embarked on a major cost-cutting initiative, it is likely to only help partially offset the current headwinds. Given the significant challenges at JLR and continued geopolitical uncertainty, we reiterate our “SELL” rating on the stock.MOTILAL OSWAL ON TATA MOTORS PV
Motilal Oswal values JLR and the India PV business at 2 times and 13 times Enterprise Value to EBITDA respectively.
How Did Tata Motors PV Fare In Q2?
For the September quarter, Tata Motors PV reported a 34% growth in its overall topline to ₹96,920 crore, but that figure turned out to be lower than the CNBC-TV18 poll estimate of ₹1 lakh crore.
The company also reported a net loss of ₹5,531 crore, compared to a net profit of ₹76,170 crore during the same quarter last year. The net loss was due to exceptional items worth ₹6,738 crore during the quarter.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹4,866 crore, compared to an EBITDA loss of ₹1,404 crore.
Shares of Tata Motors Passenger Vehicles ended 3.3% lower on Friday ahead of the results announcement, at ₹287.4.
Tata Motors PV shares are a ‘sell’ candidate after Q2 results, Motilal Oswal says after cutting target