Tata Motors stock tumbles as Q3 earnings disappoint; brokerages turn cautious

Tata Motors shares plunged 9 per cent connected January 30, hitting a 52-week debased of Rs 684.25 connected the BSE, arsenic its Q3FY25 net fell abbreviated of marketplace expectations. Despite reporting a 3 per cent year-on-year (YoY) summation successful gross to Rs 1.13 lakh crore, the company’s consolidated nett net dipped 22 per cent YoY to Rs 5,451 crore, importantly missing the ET Now canvass estimation of Rs 6,791 crore. Investor sentiment took a deed arsenic muted maturation forecasts and weaker margins weighed connected the stock.

JLR delivers, but challenges persist

Jaguar Land Rover (JLR), a cardinal gross operator for Tata Motors, posted grounds Q3 gross of £7.5 billion, up 1.5 per cent YoY. However, nett earlier taxation (PBT) declined to £523 cardinal from £627 cardinal successful the erstwhile year. The luxury carmaker's beardown sequential betterment was overshadowed by concerns implicit softening request successful China and Europe. Analysts besides flagged expanding warranty costs and increasing contention successful the EV conception arsenic imaginable headwinds.

Weak CV and PV segments interaction earnings

Tata Motors' commercialized conveyance (CV) part struggled, with revenues declining 8.4 per cent YoY to Rs 18,400 crore. Although EBITDA margins improved by 130 ground points (bps) to 12.4 per cent, the broader slowdown successful infrastructure spending and a precocious basal effect constricted maturation potential. The company’s rider conveyance (PV) concern besides posted a 4.3 per cent YoY diminution successful gross astatine Rs 12,400 crore, contempt dependable volumes of 1.4 lakh units. Meanwhile, the electrical conveyance (EV) conception registered a 19 per cent YoY emergence successful the home idiosyncratic segment, though fleet income dipped owed to the expiry of the FAME II subsidy.

Brokerages crook cautious

Nuvama downgraded Tata Motors with a 'Reduce' rating, slashing its people terms from Rs 750 to Rs 720, citing borderline misses and muted maturation prospects. It expects JLR volumes to declaration astatine a -4 per cent CAGR owed to an exhausted bid publication and the discontinuation of prime Jaguar models. The India CV conception is besides projected to turn astatine conscionable 1 per cent CAGR owed to sluggish demand. Jefferies took a much bearish stance, downgrading the banal to 'Underperform' with a revised people of Rs 660 (down from Rs 930), citing brushed JLR demand, rising acquisition costs, and intensifying EV competition.

Outlook: What lies ahead?

Despite a challenging quarter, Tata Motors remains optimistic astir semipermanent prospects, with absorption reiterating assurance successful sustained net growth. However, outer factors specified arsenic request softness successful cardinal markets, rising input costs, and argumentation shifts successful the EV abstraction stay important determinants. Investors volition intimately ticker upcoming quarters to measure whether the institution tin flooded these near-term hurdles and regain momentum successful some home and planetary markets.