Tata Motors Share Price: This Tata Group-backed automobile giant, has continued to underperform benchmarks Sensex and Nifty so far in 2025. On February 25, the heavyweight large-cap even touched a new 52-week low. Tata Motors shares have been back-to-back lows and are down by nearly 12% year-to-date. Despite this brokerage, CLSA is bullish on the auto stock.
Tata Motors Share Price:
Tata Motors stock ended at Rs 661.75 apiece on BSE, which was near its new 52-week low of Rs 660.10 apiece that was recorded on February 25. The company's market cap is at Rs 2,43,602.70 crore. The stock's price-to-equity ratio is at 39.30x and the return on equity is about 20.24%.
YTD, the stock is down by 11.7%. In the past six months, the stock's decline is over 39%.
Tata Motors is in the process of demerger. The company's demerger will be of two separate listed companies housing A) the Commercial Vehicles business and its related investments in one entity and B) the Passenger Vehicles businesses including PV, EV, JLR, and its related investments in another entity. 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.
The demerger is expected to come into effect in October this year.
CLSA Recommendation on Tata Motors share price:
According to CLSA, the key investor concerns for Tata Motors are --- there e have been investor concerns around weak demand environment in key markets of JLR like EU, China, UK, along with the risk of import tariffs getting implemented in US.
It said, "EBIT margin guidance of ~10% by management may be tough to achieve in current demand environment, we believe. Launching EVs in a period when demand is not picking up, would also add to margin risk. Domestic HCVs continue to report declining retails, thus posing a risk to sustainability of ~11-12% standalone margin in FY26CL. Rising competitive intensity could impact market share and profitability of India PV business, including EVs."
Notably, CLSA highlighted that JLR implies FY27CL EV/EBITDA of ~1.2x at current price vs. normative multiple of 2.5x shows the extent of uncertainty on the business outlook ahead. Another way to infer that would be partial de-rating from 2.5x to 2x and ~25% cut in EBITDA estimate. Thus, current price of JLR is already building in ~sub-8% EBIT margin and ~10% volume decline in FY26.
That being said, CLSA is building in 5% decline in goods M&HCVs for TTMT in FY26, in-line with our industry outlook, leaving limited scope for cut in numbers there. But, post a couple of subdued years for M&HCVs, CLSA believes cyclical revival from FY27, would start getting priced in coming quarters, as the company enters in FY26.
Thereby, CLSA added, "We upgrade TTMT to HC O-PF from O-PF, with unchanged TP of Rs930, implying 10x/2.5x FY27CL EV/EBITDA and DCF based TP of India PV business."
Among key factors to monitor in Tata Motors as per CLSA are --- monthly retail demand/discounting for JLR in key markets, tariff implementation by US on imports from EU, if any, Chinese OEM grabbing market share in EU/UK, domestic M&HCV monthly retails and new launches in India PV portfolio.
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