Broker’s call: Tata Motors (Buy)

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Target: ₹1,175

CMP: ₹967.30

We upgrade Tata Motors (TTMT) to Buy from Add, keeping our SoTP-based TP unchanged at ₹1,175/share (incl. roll-over to Sep-26E). TTMT stock price has corrected 16 per cent from its peak, amid outlook downgrade at peer BMW (incl. due to muted China demand; link), and slowness in domestic CVs/PVs (incl. rising discounts/price cuts; link).

We highlight that: for JLR, China is a relatively smaller market (about 24 per cent vs 32 per cent for BMW), while profitability and debt outlook are largely intact; India CV outlook is improving, with margins likely to see strong increase led by healthy fleet operator profitability, sustained pricing discipline; new launches, lower inventory would help outperformance vs a weak PV industry.

Underlying metrics for the domestic PV industry continue to worsen amid slowing retails, rising inventory, and increasing discounts; our channel checks point to further weakness in outlook beyond the upcoming festive period. While TTMT would also be impacted by the overall sluggishness, we believe new launches including Curvv and relatively lower inventories would help it post better-than-industry performance

TTMT’s balance-sheet is healthier now, with valuations least demanding among OEMs. We trim FY26/27 EPS by about 2.5 per cent (5 per cent/11 per cent revenue/ PBT CAGR).