“We cut FY26-28E EPS by 8-15% on lower volumes and margins for JLR and India PVs. We expect a 19% EPS decline in FY26E, followed by just 8% CAGR over FY26-28E. Our FY27-28 EPS estimates are 12-21% below Street. We see multiple above-mentioned challenges across business; and we are unconvinced about the Iveco acquisition (A Risky Detour). TTMT stock has lagged Nifty-50 by 21% since Jan (Downgrade to UNPF), and we retain UNPF with a revised Rs 550 PT (earlier Rs 600). We prefer MM & TVSL in autos,” according to a report by the brokerage.
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The report mentioned that fall in Q1 EBITDA below JEFe was led by lower margins in JLR and India PVs. JLR wholesales fell 11% YoY with lower sales across the US (tariff impact), UK, and Europe. India PV volumes fell 10% YoY, and EBITDA declined 37% YoY as margin fell to 4.0% (14-qtr low). India CV volumes also fell 6% YoY, but EBITDA was flat YoY as margin rose 60bp YoY to 12.2%, the Jefferies report said.
On the rising headwinds at JLR, the global brokerage said while the US trade deals with UK/EU at 10-15% tariffs bring some relief, we believe JLR will continue to face severe business pressures due to rising competition and additional 10% consumption tax in China, high customer acquisition cost & warranty expenses, and BEV transition, while its key models (RR, RR Sport and Defender) are now 2-4 years old.
After a strong 45% CAGR over FY21-23, truck industry wholesales were flat in FY24 and fell 4% YoY in FY25/1QFY26; we expect a modest 3% CAGR over FY25-28E, the report said.
On the long-term view, the Jefferies report said that JLR is facing pressures including increased competition and tariffs in China, higher warranty costs and BEV transition, while its key models are starting to age, In India, TTMT’s PV market share is slipping, and CV demand is weak, and we are unconvinced on Iveco acquisition too.
The company reported a steep 63% year-on-year (YoY) decline in consolidated net profit for the June quarter (Q1FY26). For the quarter ended June 2025, Tata Motors’ consolidated net profit fell to Rs 3,924 crore from Rs 10,514 crore in the same period last year.
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The company’s total revenue from operations stood at Rs 1.04 lakh crore, marginally down 0.3% from Rs 1.07 lakh crore recorded in the corresponding quarter of the previous financial year.
The company attributed the moderation in performance to a challenging demand environment and stated it will focus on strengthening its business fundamentals. Measures outlined include mitigating tariff impacts through brand leverage, improving product mix, and implementing targeted actions to enhance contribution margins.
In the current calendar year so far, the shares of Tata Motors have fallen by 13% and in the last one year have gone down by 39.98%.
