JPMorgan has downgraded Tata Motors to Neutralwith a target price of ₹740, citing emerging headwinds across its core businesses that could weigh on earnings in the near term.
According to the brokerage, Tata Motors now faces a new set of challenges, including:
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Tariff risks and an ageing portfolio at Jaguar Land Rover (JLR),
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Muted industry growth and market share pressures in its domestic Commercial Vehicle (CV) and Passenger Vehicle (PV) segments.
JPMorgan believes that FY26 will be a tough year for Tata Motors, projecting that the company could turn net debt again during the year as these challenges play out.
Looking further ahead, the brokerage expects FY27 and FY28 to offer a window for balance sheet repair and operational improvement, supported by:
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A gradual pass-through of tariffs and the launch of new electric vehicles (EVs) at JLR,
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A cyclical recovery in India’s CV market,
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Market-share stabilisation and margin improvement in India PVs.
Investor focus will now turn to the company’s upcoming Investor Days — scheduled for June 9 (India businesses) and June 16 (JLR) — where management’s guidance and strategy across all business lines will be closely scrutinised.
Disclaimer: The views and target prices mentioned in this article are as stated by JPMorgan. They do not represent the opinions or recommendations of this publication. Readers are advised to consult their financial advisors before making any investment decisions.
