TMPV shares fall nearly 6% as JLR weakness and margin concerns weigh, brokerages divided
TMPV leads losers on Nifty 50
On June 30, 2023, shares of Tata Motors Permanent Account Number (TMPV) slipped nearly 6 percent in the first trading session, trailing the broader Nifty 50 decline. The dip came after TMPV disclosed an 80.3 percent year-on-year plunge in consolidated net profit for the June quarter, reporting ₹775 crore. The slump was attributed to weaker profitability at Jaguar Land Rover (JLR) and rising commodity costs.
At approximately 9:34 AM, TMPV traded 4 percent lower at ₹333.40 following a low of ₹329, down from its previous close of ₹349.60.
Despite a strong upcoming launch cycle, including the electric Range Rover in September 2026, followed by the RRS Electric, RR GT, and the Jaguar Type 01, TMPV's financial performance remains a concern. JLR maintains its target of double-digit revenue growth over the next five years, centered around improved propulsion flexibility, enhanced premium positioning, and a strategic emphasis on North America.
The company anticipates that the shift to higher EV sales will be margin-neutral or margin-accretive, as newer EV models are expected to replace end-of-life vehicles with lower margins, thereby bolstering overall profitability.
JLR's FY27 guidance remained unchanged even after the weaker-than-anticipated Q1 results. However, the company acknowledged the need to accelerate the execution pace throughout the year to offset the Q1 shortfall. TMPV's India PV business is projected to grow at a high double-digit pace, roughly twice the industry's growth rate. India exports are expected to surge by 100 percent in FY27 as international expansion advances.
Brokerages offered varying perspectives on TMPV. Macquarie maintained an "outperform" rating with a target price of ₹381, citing disappointed margins and lingering risks. CLSA retained an "outperform" rating with a target price of ₹452, noting that JLR's EBIT margin was 2.8 percent in Q1FY27, 90 basis points above estimates, while the domestic passenger vehicle EBIT margin was 4.3 percent, 250 basis points below estimates.
HSBC held TMPV and lowered its target price to ₹360, attributing the dip to commodity headwinds in Q1 that could persist into Q2. Citi downgraded TMPV to a "sell" and reduced its target price to ₹305, citing Q1 results that fell far short of estimates and ongoing margin concerns. Motilal Oswal kept its "sell" rating with a SoTP-based target price of ₹310, raising its FY27 EPS estimate by 12 percent due to stronger-than-expected JLR performance in Q1, but warned of continued headwinds, including rising commodity costs and pressure on India business margins.
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