Sell, underperform, target cuts: What's spooking Tata Motors investors?
Mumbai/IBNS: Shares of Tata Motors Passenger Vehicles (TMPV) are expected to remain in focus on Thursday after brokerages adopted a cautious stance on the automaker's latest outlook and commentary during its investor day, according to a report by NDTV Profit.
The company's FY27 guidance triggered a sharp selloff on Wednesday, with the stock plunging nearly 10 percent.
FY27 Outlook Fails to Impress Investors
Jaguar Land Rover (JLR), the British luxury carmaker owned by Tata Motors, said it expects revenue to grow by around 13 percent in fiscal year 2027.
However, investors appeared disappointed by the company's projected EBIT margin of 4 percent, amid rising cost pressures and continued uncertainty in the global business environment.
The cautious margin outlook overshadowed the revenue growth forecast, leading to heavy selling in the stock.
Brokerages Cut Target Prices
Global brokerage firm Citi maintained its 'Sell' rating on Tata Motors, citing concerns over the company's FY27 outlook.
The brokerage reduced its target price to Rs 320, implying a decline of around 10 percent from the stock's previous closing price of Rs 360.95.
CLSA retained its 'Outperform' rating on the stock but also lowered its target price to Rs 452 from its earlier estimate.
Meanwhile, Bank of America (BofA) reiterated its 'Underperform' rating and cut its target price to Rs 335, indicating a potential downside of about 7 percent.
Stock to Remain in Focus
With multiple brokerages revising their target prices and expressing concerns over profitability, Tata Motors shares are likely to remain under investor scrutiny in the coming sessions.
Market participants will closely watch how the company navigates cost pressures and executes its growth strategy amid an increasingly challenging global automotive landscape.
Why JLR Matters to Tata Motors
Jaguar Land Rover is a key earnings driver for Tata Motors and contributes a significant portion of the group's revenue and profitability. As a result, any change in JLR's growth outlook, margin guidance or demand forecast tends to have a direct impact on investor sentiment towards Tata Motors.
The latest guidance comes at a time when global automakers are grappling with slowing demand in some markets, supply-chain uncertainties and higher operating costs, prompting investors to focus more closely on profitability than revenue growth.
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