Tata Motors Ltd (TMCV IN) Buy: Near-term uncertainty, long-term outlook intact

Research evidence excerpt

Tata Motors Ltd (TMCV IN) Buy: Near-term uncertainty, long-term outlook intact

r 2025). TMCV’s

valuation is still at a c10% discount to the PV industry and a c12% discount to Ashok 52-WEEK PRICE (INR)

Leyland. This leaves some scope for more re-rating of Tata Motors, in our view, especially 530.00

considering non-cyclical business growth is faster than cyclical business. 410.00

4QFY26 highlights: TAMO CV reported revenue of INR261bn, up c19% y-o-y, in line 290.00

with HSBCe and above consensus. ASP rose 4% q-o-q to INR1.97m. EBITDA margin 05/25 11/25 05/26 Target price: 490.00

was up 90bp q-o-q to 12.7% largely due to 110bp savings in staff cost, offset by a 20bp High: 505.30 Low: 317.60 Current: 384.25

gross margin decline. Reported EPS in 4Q was INR5.51 vs INR4.64 in 3Q. Source: LSEG IBES, HSBC estimates

Key takeaways from management call: Growth outlook: Management expects single-

Yogesh Aggarwal*

digit growth in 1QFY27 as freight rates and demand stay strong but remains cautious Head of Research, India

about a potential increase in diesel prices. Currently, fleet owners are preferring to HSBCLimitedSecurities and Capital Markets (India) Private

purchase medium and light CVs rather than heavy CVs (see Commercial vehicles - Both yogeshaggarwal@hsbc.co.in

+91 22 2268 1246

demand and supply are facing headwinds, 25 March 2026). Commodity cost inflation:

Vipul Agrawal*, CFA

TAMO CV faced a 100bp cost headwind in 4Q and expects a higher impact in coming Analyst, India Automotive

quarters. It has raised prices by 2% in April but has taken a stand to not further increase HSBC Securities and Capital Markets (India) Private

Limited

prices soon to prevent discouraging demand. IVECO: The transaction is now expected to vipul.agrawal@hsbc.co.in