Tata Motors stock climbed up to 4% on April 8, trading around ₹592.35, buoyed by a broad market rally that lifted the Sensex by over 1,100 points. However, analysts caution that the uptick may be temporary due to mounting global challenges, particularly affecting its UK subsidiary, Jaguar Land Rover (JLR).
BoFA: “Strong Q4, But Clouds on the Horizon”
Despite meeting its FY25 target of becoming net debt-free and delivering a solid Q4 operational update, Bank of America (BoFA) Securities remains cautious. The firm highlights stagnant wholesale growth and a 5.1% drop in JLR’s retail volumes, with demand slumping in China. Although North American sales rose 14.4%, fresh US tariffs now pose a serious threat.
BoFA has reaffirmed a ‘neutral’ rating on Tata Motors and cut its price target to ₹655. It now values the India business at ₹475—marking a potential bear-case floor—and has reduced its FY25 earnings per share (EPS) estimate by 16%.
JLR Halts US Shipments Amid Tariff Shock
In a significant blow, JLR has suspended all vehicle shipments to the US for April following the Trump administration’s imposition of a 25% tariff. The US, accounting for roughly 20% of JLR’s revenues, is a key market. These new tariffs—on top of existing levies on steel and aluminum—are expected to drive up costs and strain cash flows, BoFA warns.
Valuation Challenges Despite Healthy Cash Flow
Despite these hurdles, JLR wrapped up FY25 in a net cash-positive position and generated £1.2 billion in free cash flow in Q4. Morgan Stanley, noting long-term potential, has maintained an ‘Equal Weight’ rating and raised its price target to ₹853, citing FY26 as the next inflection point.
Currently, among 34 analysts covering Tata Motors, 20 recommend a ‘buy,’ 8 suggest a ‘hold,’ and 6 advise a ‘sell.’ Nonetheless, with the stock still near its 52-week low, investor sentiment remains cautious amid tariff pressures and geopolitical uncertainty.
