Unleashing Tata Motors’ Growth Potential: Analysts Bullish on Strategic Roadmap to Profitability
Tata Motors recently unveiled its ambitious roadmap at India Investor Day, targeting a stronger market position and improved profitability in both passenger vehicles (PVs) and commercial vehicles (CVs). According to Jefferies analysts, Tata’s strategic goals and growth projections signal a promising future for the company.
With plans to increase its market share in the PV segment from 14% in FY24 to 16% by FY27 and further to 18-20% by FY30, Tata Motors is set to launch a series of new products, including the Curvv mid-sized SUV and Harrier electric SUV in FY25, followed by the Sierra and Avinya EVs in FY26. These introductions are expected to expand Tata’s addressable market significantly.
Jefferies maintains a “Buy” rating for Tata Motors, with a price target of INR 1,250, reflecting a 28% upside. The outlook is supported by robust growth projections across Tata’s segments, including Jaguar Land Rover (JLR), India CVs, and India PVs.
Analyzing the projections, Jefferies forecasts a 13% CAGR in EBITDA and a 23% CAGR in EPS over FY24-26, with Tata Motors’ auto balance sheet expected to show $4.6 billion in net cash by FY26. The company is also focused on improving profitability in the PV segment by enhancing EBITDA margins and aiming for breakeven in the EV segment by FY26.
In the CV segment, Tata Motors aims to capitalize on industry growth and reduce business volatility by increasing non-vehicle revenues and maintaining a strong EBITDA margin. The company’s strategy includes enhancing its product portfolio, investing in alternate fuel technologies, and leveraging digital solutions for sustainable growth.
Overall, Tata Motors’ strategic roadmap and growth projections indicate a promising future for the company, with potential for significant market position enhancement and financial performance improvement. Investors should consider these factors when evaluating their investment decisions to capitalize on Tata Motors’ growth potential.