Tata Motors Shares In Focus As CLSA Downgrades Rating And Cuts Price Target – News18
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Tata Motors’ shares fell 2.43% after CLSA downgraded the stock, citing US tariffs and Jaguar model stoppages. Shares have dropped 43% since last year’s peak.
CLSA downgrades rating of Tata Motors. (File photo)
Tata Motors Share Price: Tata Motors’ Shares will remain in focus today after CLSA has downgraded the auto stock and removed from ‘high conviction’ list. The brokerage has also cut the price target for the Tata stock.
CLSA underlined the dual shock in the form of 25 per cent import tariffs in the US for all foreign-made automobile and the stoppage of the Jaguar Models, leading to a volume decline of 14% YoY for Jaguar Land Rover (JLR) in the financial year 2026.
On Thursday, Shares of Tata Motors slid 2.43 per cent following the US president Donald Trump’s announcement of new tariffs including a 25 per cent tariff on foreign made cars. The scrip ended at Rs 655.55 per share, against the previous day close at Rs 671.90 apiece.
Tata Motors’ Shares have fallen almost 43 per cent since the peak at Rs 1,161 apiece last year in August. Its 52-week high and low remained at Rs 1,179 and Rs 606, respectively.
Brokerages warned of a broader economic impact on Indian exports due to the wide-ranging tariffs. Macquarie pointed out that auto exports, constituting 3% of India’s shipments to the US, will suffer, potentially affecting India’s GDP significantly. UBS described the tariffs as higher than expected, making some exports unviable and posing a negative development for the Indian market.
Tata Motors Share Price Target 2025
Tata Motors was downgraded back to its “outperform” rating and its price target was cut by 18% to ₹765 from ₹930 earlier.
Tata Motors may see its EBIT margins decrease to 7% in the financial year 2026-2027, compared to the 9% anticipated this year, due to lower scale.
Therefore, CLSA has lowered JLR’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) estimate for the financial year 2026, although it expects JLR to remain free cash flow positive in both financial years 2026 and 2027.
CLSA has also reduced JLR’s target Enterprise Value-to-EBITDA multiple from 2.5x to 2x due to near-term growth challenges, which it believes are already priced in, as JLR is currently trading at 1.1 times EV/EBITDA.
With India’s commercial vehicle cycle set to bottom out in the financial year 2026, the brokerage has extended Tata Motors’ India CV business valuation by a year to the financial year 2028, which could potentially add ₹127 per share to its price.
