Tata Motors PV: Analysts cautiously positive despite Q3 loss, JLR headwinds
Tata Motors Q3FY26 results: Analysts stay cautiously positive as India PV growth improves, JLR outlook stabilises. Targets range ₹310-₹460.
 "Tata Motors PV: Analysts cautiously positive despite Q3 loss, JLR headwinds")
Tata Motors share price today
Tata Motors share price target, outlook: Dalal Street analysts remain cautiously positive on Tata Motors Passenger Vehicle after the PV-arm of Tata Motors reported a mixed set of results for the December quarter of the current fiscal (Q3FY26).
The optimism, they said, comes amid an improvement in India business, along with a steady Jaguar Land Rover (JLR) outlook. The Tata Motor group company, analysts expect, could see accelerated growth ahead driven by favourable product mix, strong response from new launches, cost optimisation benefits, and rising margin. "Q3FY26 was a weak quarter for Tata Motors Passenger Vehicles (TMPV). Nevertheless, JLR's Ebitda margin was ahead of our estimate. Domestic PV margin also improved sequentially. While VME spends will likely remain elevated in the near term
owing to a challenging demand environment, we believe the worst is largely behind for JLR," ICICI Securities said as it upgraded the stock to 'Add' from 'Hold'.
Tata Motors Q3 results
In the October-December quarter of the ongoing financial year, Tata Motors Passenger Vehicles (TMPV) reported a net loss of ₹3,483 crore, as against a profit of ₹4,164 crore in the corresponding quarter last year (Q3FY25), hit by the JLR cyber attack incident, and provisioning on account of Labour Code and stamp duty changes (post demerger with commercial vehicle business).
Operationally, TMPV’s consolidated revenue slumped by 26 per cent year-on-year (Y-o-Y), coming down to ₹70,108 crore.
JLR posted a loss of 298 million pounds in Q3FY26, compared to a profit of 375 million pounds last year, and recorded a 39 per cent decline in revenue as the August-September JLR cyber attack reduced the company’s production by around 50,000 units. Of this, 30,000 units impacted Q3 results.
Besides, discontinuance of ‘Jaguar’ models, market share loss in China on intense competition and increased luxury tax, tariffs in the US, and muted Europe demand also hit JLR operations.
The company’s consolidated Ebitda (earnings before interest, tax, depreciation, and amortisation) margin, however, improved to 1.3 per cent, aided by rise in JLR’s Ebitda margin to 0.7 per cent.
The company’s standalone operations (India business) also saw a 26 per cent revenue growth, leading to a 50bps quarter-on-quarter (Q-o-Q) Ebitda margin expansion to 4.5 per cent.
Glimmer of hope
Going ahead, JLR management has maintained its Ebit margin guidance of 0-2 per cent and free cash flow (FCF) guidance range of (minus) 2.2 billion pounds to (plus) 2.5 billion pounds.
This, analysts at Emkay Global Financial Services said, implies 0.5-0.8 billion pounds of FCF in Q4FY26.
“End-market outlook for JLR is steady across markets, barring China, where JLR is facing headwinds and undertaking targeted interventions. Moreover, JLR is set to launch the electric variant of Range Rover (Range Rover EV) in FY27 and the Freelander (initially in China; global roll-out later),” the brokerage said.
‘India business accelerating’
Back home, analysts remain confident of Tata Motors PV’s India business gaining momentum, given the recent cuts in goods and services tax (GST), strong response to recent launches (Sierra, new Punch, petrol variants of Harrier/Safari), and cost optimization initiatives.
These cues, they said, are expected to aid margin rise.
“The management gave guidance for growth of 13-14 per cent in the PV industry in Q4, and 40 per cent in TMPV, implying 8-9 per cent PV industry growth in FY26 and mid-teens growth for TMPV. Given this, we haul up our share price target to ₹460 from ₹400, to factor in the improving outlook for the India PV business,” Emkay Global said with an ‘Add’ rating.
On average, analysts see India PV revenue growing at a 19-per cent CAGR (compounded annual growth rate) over FY26–28, driven by 15 per cent volume growth, supported by launches, healthy demand conditions, higher scale, receipt of PLI incentives, and cost savings.
By FY30, the company plans to expand its portfolio to 15 nameplates with seven new products, including the Sierra, the Avinya range, two new ICE (internal combustion engine) models, and two new EVs. Ebitda, thus, could grow at a faster 42-per cent CAGR over FY26–28, they added.
“The outlook for Q4FY26 remains strong, with industry growth of 8-9 per cent in FY26, and the management expecting TMPV to outperform the industry with mid-teen volume growth in FY26. Growth is expected to be supported by new launches, while low dealer inventory (under 15
days) also corroborates the growth outlook,” noted JM Financial Institutional Securities.
Word of caution
Global brokerage Jefferies has maintained its ‘Underperform’ rating on the stock as it noted that even though Q3FY26 results were better-than-estimates and Q4 could see further improvement, multiple headwinds remain.
“India PV business remains relatively better positioned than JLR; yet, it may not be able to fully offset JLR drag,” the brokerage said. It maintained its target price of ₹310.
JM Financial, too, maintained its ‘Reduce’ rating and target price of ₹357 owing to JLR challenges.