First Read: Tata Motors Passenger Vehicles "Decent Q4FY26; risks rising on..."

Research evidence excerpt

First Read: Tata Motors Passenger Vehicles "Decent Q4FY26; risks rising on..."

d by healthy SUV dispatches during the quarter. India EBITDA From To % ch Cons.

margins came in at 9.4% (9% excluding prior-period PLI), above our estimates, largely 03/26E 2.42 2.72 13 6.46

aided by strong cost control. On the JLR side, ASPs were relatively weak due to elevated 03/27E 24.75 26.20 6 36.82

VME and the strengthening of the £ against the $, while EBIT margins surprised 03/28E 26.00 28.39 9 51.76

positively, supported by favourable FX movements and hedge gains. JLR FCF for Q4

stood at £830mn v/s. our estimate of £700mn. Pramod Kumar

Analyst

pramod.kumar@ubs.com

Key earnings call takeaways +91-22-6155 6063

1) Management expects the domestic PV industry to grow 10% in FY27, with the

Vedant Kshatriya

company likely to outperform industry growth; 2) The Sierra EV launch is scheduled for

Associate Analyst

the next quarter; 3) The company plans to introduce 2 new nameplates and 4 facelifts in vedant.kshatriya@ubs.com

its India portfolio over the year; 4) On JLR demand, UK and Europe remain stable, the +91-22-6155 6008

Middle East has been impacted, while other overseas markets are broadly stable; China

remains relatively weaker, while the US presents incremental opportunities; 5) The

Range Rover EV has garnered ~78K expressions of interest to date.

Valuation: Maintain Sell with a revised PT of Rs325

We value Tata Motors’ PV business using a SoTP framework. We continue to assign a

multiple of 15x 1-year forward EV/EBITDA to the India business and 2.6x 1-year forward

EV/EBIT to the JLR business, while rolling forward our estimates to incorporate FY28E.

Additionally, we assign a value of Rs25/share to Tata Tech and Rs46/share to Tata Sons

investments in our valuation.