Tata Motors PV shares fall 5% after weak Q1 results. What are Morgan Stanley, Nomura, others saying?

Tata Motors Passenger Vehicles shares slipped 5% to Rs 330 on the BSE following a sharp 80% year-over-year decline in consolidated net profit for the April-June quarter of FY27. The profit fell to Rs 775 crore from Rs 3,924 crore in the same quarter last year due to supply constraints, including a fire at a key component supplier, Middle East conflict, and a planned Jaguar wind-down. Despite a 9% YoY rise in revenue from operations to Rs 95,799 crore, the EBITDA margin contracted by 130 basis points to 7.4%.

Analysts from Morgan Stanley, Nomura, and others have expressed varying opinions on Tata Motors PV shares. Morgan Stanley maintains an Equal-Weight rating with a target price of Rs 367, suggesting 5.5% upside. They expect strong India PV volumes and high-teens growth in FY27 but warn of near-term margin pressure due to commodity headwinds.

Nomura remains Neutral with a target price of Rs 389, anticipating strong demand in the Indian passenger vehicle market but anticipating steep cost pressures to weigh on margins. Citi, on the other hand, has cut its target price to Rs 305, indicating a 12% downside, due to significant cost headwinds and continued under pressure on margins.

Motilal Oswal also retains a Sell rating with a target price of Rs 310, citing multiple challenges including geopolitical uncertainty.