Tata Motors, the automobile giant of Tata Group, continued to trade volatilely in 2025. The stock is currently less than Rs 26 away from hitting the Rs 700 mark and has gained by 24% from its 52-week low of Rs 542.55 apiece. However, it's still down by 10% YTD. Majority of experts are recommending accumulating or buying Tata Motors for a target price between Rs 700 to Rs 800. Investors are keenly awaiting Tata Motors' demerger in a 1:1 ratio.
Tata Motors Share Price:
After market hours of June 25, Tata Motors stock price ended at Rs 674.40 apiece, mildly up on BSE with market cap of Rs 2,48,277.82 crore. The stock's 52-week high and low are at Rs 1,179.05 apiece and Rs 542.55 apiece respectively.
Its price-to-equity ratio is at 45.54x, while return on equity (ROE) is at 17.81%, which is still healthy. In past 1 month, the stock is down by 7.5%, while its six-monthly performance is lower by 9%. However, year-to-date, the stock dropped nearly 10%. In a year, Tata Motors shed over 29%.
Tata Motors Split:
During the 80th annual general meeting (AGM) of Tata Motors, Chairman N Chandrasekaran shed light on the demerger plans. He said the company will be split into two listed entities soon. One will be focused on commercial vehicles (CV) and the other will emphasize on passenger and JLR cars segment.
As part of the demerger plan, Tata Motors shareholders will get 1 share of TMLCV with a face value of Rs 2 each for every 1 share held in the company. This makes the business split ratio to 1:1.
Is It Right Time To Invest In Tata Motors?
After attending the annual investor day, analysts at Emkay Global highlighted key takeaways. These are:
1) TTMT gave guidance for FY25-30 CV industry volume CAGR of 3-5%; revenue CAGR to be higher on continued shift to higher-tonnage vehicles and enhanced focus on higher margin non-cyclical revenue.
2) TTMT eyes 40% CV market share by FY27 (~38% in FY25), led by product actions (renewed focus on LCVs; growing bus penetration), leaner cost structures, and improved after-sales service.
3) Near-term demand is improving amid healthy fleet operator profitability and better utilization; TTMT expects growth over coming quarters.
4) In CVs, TTMT eyes margin expansion to the teen-level by FY27 vs 11.6% in FY25; it targets resilient profitability (doubledigit EBITDA margin across cycles) with 7-9% revenue FCF by FY27.
5) In PVs (incl EVs), TTMT expects to improve its market share to 16/18-20% by FY27/30 (vs 13.2% in FY25) aided by 7 new nameplates with multi-powertrain options by FY30.
6) Guides to over 10% EBITDAM (6.9% in FY25) with healthy FCF (Rs10bn in ICE-PVs; E-PV FCF negative in medium term) on higher scale, product mix, and cost efficiencies.
Following this, Emkay's analysts said, "TTMT's CV business is on a strong footing, on robust profitability-led growth amid a potential demand recovery in the CV cycle. PV business performance, though, will be muted amid a weak industry demand environment and lukewarm response to recent launches. Our estimates are unchanged."
Meanwhile, Elara Capital pointed out that Jaguar Land Rover (JLR), a subsidiary of Tata Motors, recently hosted its annual investor meet in the UK, with focus on 'House of Brand' strategy and rebranding the Jaguar brand (niche modern luxury positioning). FY26 may be a challenging year for JLR and its global peers. JLR's margin outlook is at 5-7%, lower than our expectations of 7.8%.
Factoring the guidance, Elara's note said, "Factoring in the revised guidance of GBP 28bn revenue and 5-7% EBIT margin, we lower our FY26E EBIT margin estimate to 6%, with 5% volume decline anticipated (earlier estimate: 3% volume drop). Adverse working capital would also remain a challenge for free cashflow in FY26 (Q4FY25 working capital benefited from the advancement of US sales ahead of tariff implementation - a dynamic that is unlikely to repeat in Q4FY26). Also, the ramp-up in BEV will hit working capital, per our interaction with the management. So, we lower our FY26E-28E EPS estimates by 19-9% and trim SoTP-TP to INR 734 (from INR 791) - Maintain Accumulate."
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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