Tata Motors PV (TMPV IN): Hold: Conflicting forces at play

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Tata Motors PV (TMPV IN): Hold: Conflicting forces at play

management guides to 25%+ 52-WEEK PRICE (INR)

revenue CAGR, ~4% EBIT margin (ex-PLI), and a ~3x increase in PBT to cINR42bn

460.00

in FY29 – broadly in line with our estimates. While EBIT margins are in line and still

inferior to the peer group, the revenue target seems optimistic given the expected 365.00

competitive launches. Margins may continue to be impacted by the rising EV 270.00

07/25 12/25 06/26

penetration for TMPV. Longer term, revenue is targeted to grow at a 19% CAGR from Target price: 400.00

FY26 to FY31, with volumes doubling to 1.2mn units and EBIT margin exceeding 5%. High: 435.57 Low: 296.20 Current: 352.20

Source: LSEG IBES, HSBC estimates

This implies a 5-6% market share gain; given peers’ aggressive launch pipelines and

capacity expansion plans, we believe achieving this share gain could be challenging.

Yogesh Aggarwal*

Head of Research, India

JLR business: Management’s FY27 outlook was a let-down with 13-15% YoY volume HSBC Securities and Capital Markets (India) Private Limited

growth and ~4% EBIT margin. The RR-EV launch is imminent, but the target segment yogeshaggarwal@hsbc.co.in

+91 22 2268 1246

is too small to make a major difference to overall JLR volumes. The planned launch of

Vipul Agrawal*, CFA

two EMA platform-based Range Rover/Defender models in FY28/FY29 are critical and Analyst, India Automotive

should help refresh the ageing ICE portfolio. JLR’s FY31 EBIT margin target of 10% HSBC Securities and Capital Markets (India) Private Limited

vipul.agrawal@hsbc.co.in

looks ambitious at this stage. We now forecast GBP200m cash burn in FY27. +91 97690 51842

View and valuation: On EV/EBITDA, valuation appears attractive; though on P/E, Ayush Jhunjhunwala*