On Tuesday, Citi resumed its coverage of Tata Motors Ltd (NS:TAMO). (TTMT:IN) stock with a positive outlook, assigning a Buy rating and setting a price target of INR930.00.
The firm highlighted the improved product mix at Jaguar Land Rover (JLR), which now includes more Range Rover, Range Rover Sport, and Defender models, leading to better margins and a stronger position against competitors.
JLR is expected to see a significant upturn in its performance during the second half of the fiscal year 2025 and into fiscal year 2026, as it recovers from supply chain disruptions that impacted its second-quarter fiscal year 2025 results. The luxury carmaker's enhanced product range is anticipated to drive this improvement.
In India, the commercial vehicle (CV) industry is projected to experience a stronger second half in fiscal year 2025 compared to the first, buoyed by increased capital expenditures and infrastructure activities. Tata Motors (NYSE:TTM), which leads the CV segment, has seen a notable surge in profitability.
While Tata Motors' Indian passenger vehicle (PV) business faces heightened competition, the company could see advancements due to higher volumes, reduced costs, and Production Linked Incentive (PLI) benefits for electric vehicles (EVs). Citi's hierarchy for Indian automobile stocks places Maruti Suzuki at the top, followed by Mahindra & Mahindra (NS:MAHM), and then Eicher Motors (NS:EICH).
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