Tata Motors Passenger Vehicle shares jump 8% on strong India PV demand, JLR recovery

Shares of Tata Motors Passenger Vehicle rallied over 8% on Friday after investor sentiment strengthened on the back of better-than-expected performance in both its domestic passenger vehicle business and Jaguar Land Rover (JLR), the company’s wholly-owned British luxury vehicle subsidiary, following recovery from the cyberattack-related disruption.

Tata Motors Passenger Vehicle shares opened 1.9% higher at ₹345.35 on the BSE against the previous close of ₹338.85. The auto heavyweight extended gains during the session, rising as much as 8.2% to ₹366.60 in early trade, taking the company’s market capitalisation to nearly ₹1.31 lakh crore.

The Tata Group stock gained momentum after investors reacted positively to its March quarter earnings performance. While brokerages flagged near-term margin pressure amid rising input costs linked to the ongoing West Asia crisis, they largely remained constructive on the outlook for domestic passenger vehicle demand.

The company reported a profit of around ₹5,880 crore in the March quarter, sharply ahead of estimates of about ₹2,230 crore. The standalone India business posted a strong 50% year-on-year rise in revenue to nearly ₹19,200 crore, broadly in line with estimates. Operating margins expanded 90 basis points year-on-year to 8.7%, compared with estimates of around 7%, helping profit before tax nearly triple year-on-year to about ₹1,100 crore.

At JLR, volumes recovered significantly in the fourth quarter as production normalised, although they still declined 14.4% year-on-year. EBIT margins improved sharply to 9.2% from a negative 6.8% in the previous quarter, aided by higher volumes, increased product capitalisation, lower depreciation costs and foreign exchange gains. JLR’s profit before tax came in at roughly ₹5,200 crore equivalent, substantially ahead of expectations despite declining nearly 48% year-on-year.

Brokerages remain divided on outlook despite strong Q4 recovery

Motilal Oswal in its report said that JLR continues to face multiple headwinds, both on the demand and cost front. “While JLR has embarked on a major cost reduction initiative, it is likely to only help partially offset the current headwinds.”

The brokerage has reiterated its ‘Sell’ rating on the stock with a target price of 303 per share. “We value both JLR and India PV business at 2x and 13x EV/EBITDA, respectively.”

In contrast, JM Financial upgraded the stock to “Buy” from “Reduce” after a sharp recovery in profitability at JLR following the cyberattack-related disruption. The stock upgrade is supported by an improving outlook for JLR demand across Europe and the UK, growth potential in North America, and resilient demand in the Middle East despite ongoing geopolitical tensions.

The brokerage also highlighted healthy momentum in the domestic passenger vehicle business, with management guiding for nearly 10% year-on-year industry growth in FY27. It expects Tata Motors to benefit from a strong launch pipeline, including the Range Rover EV and two additional JLR launches in the second half of FY27, alongside domestic launches such as the Sierra EV, two new nameplates and four facelifts.

Another domestic brokerage Elara Capital maintained its “Reduce” rating on the stock and revised its sum-of-the-parts-based target price to ₹354 from ₹363 earlier, citing a muted global demand outlook for JLR along with rising commodity and VME costs.

The agency flagged rising vehicle margin enhancement (VME) costs and raw material inflation as key headwinds for JLR. The brokerage noted that management remains cautious on aggressive price hikes in the domestic market as it could hurt near-term demand.

Meanwhile, Emkay Global retained its “Add” rating on the stock with a sum-of-the-parts-based target price of ₹440, citing a robust domestic passenger vehicle outlook and stabilisation in JLR operations. It said commodity cost pressures are expected to continue, with Tata Motors indicating a 3.5–4% impact in Q1 FY27. The company has already implemented a 0.5% price hike in April 2026 and may consider another increase in June.

The brokerage added that rising costs are being partly offset through cost optimisation measures, operating leverage and a richer product mix. JLR, meanwhile, is witnessing stabilising demand across key geographies while maintaining tight channel inventory levels.

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