Stock Market Today: Tata Motors Shares Drop 8% in Morning Trade After Q3 Results – Buy, Sell, or Hold?
Stock Market Today: Tata Motors Share Price Plummeted by 8 Percent after Q3 Financial Results Release – Business Plans Depend on Company Performance
Tata Motors Q3 Results
The company reported a 22.5% decrease in net profit which became ₹5,578 crore in Q3 when compared to ₹7,415 crore from last year’s same period. The Jaguar Land Rover segment maintained strong performance but overall margin decline affected the company’s results.
Tata Motors experienced a quarterly profit boost reaching 62% as it revealed a previous October quarterly net profit of ₹3,450 crore.
Analysts’ Views on Tata Motors Stock
Jefferies Research revised its stance on Tata Motors to “Underperform”
Jefferies India Pvt Ltd switched its Tata Motors rating from “Buy” to “Underperform” after holding it at “Buy” for three and a half years.
Key Reasons for Downgrade:
- Tata Motors reported a year-over-year Q3 EBITDA decline of 16% that sat at 19% below Jefferies’ projection on this metric.
- The Chinese and European markets exhibit diminished demand for JLR vehicles and purchasing expenses along with warranty costs continue to rise.
- China faces slumping demand for Commercial Vehicles and Passenger Vehicles combined with projected growth in Electric Vehicle (EV) market competition across India.
- The upcoming Q4 shows promise but Jefferies analysts have made significant downward revisions to EBITDA for the financial years spanning FY25-27 through an 7-11% reduction as well as revising EPS estimates downwards by 5-10%.
- Jefferies lowered its price target for the company to ₹660 after their assessment.
- Preferred auto stocks: Mahindra & Mahindra (MM), Eicher Motors (EIM), and TVS Motors (TVSL).
Motilal Oswal Maintains “Neutral” Rating
Tata Motors faces hurdles in meeting its FY25 target of 10.2% JLR EBIT (Earnings Before Interest and Tax) margin according to Motilal Oswal Financial Services (MOFSL) which retains a “Neutral” rating for the company.
Challenges for Tata Motors:
- Weak demand in key regions.
- The company faces escalating cost burdens because it spends more money in the demand market.
- Enhanced operations in the EV market presents risks for marginalized profit yield.
- Moderation in demand for Commercial Vehicles and Passenger Vehicles in India.
The weak performance of the JLR segment caused MOFSL to decrease their projections of EBITDA by 3% and 5% for FY25 and FY26. Tata Motors does not have visible growth catalysts ahead leading the financial research team to maintain a “Neutral” rating and set a December 2026 target of ₹755.
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