Tata Motors Shares Fall 3% Post Q4 Results: Should You Buy, Hold, or Sell?

Published: May 14, 2025

Tata Motors' shares declined by 3% to ₹686 on the BSE on Wednesday, following the announcement of its Q4 FY25 results. The company's consolidated net profit fell by 51% year-on-year to ₹8,470 crore, despite revenue remaining flat at ₹1.19 lakh crore. (The Economic Times)

Key Financial Highlights

• Net Profit: ₹8,470 crore, down 51% YoY

• Revenue: ₹1.19 lakh crore, marginally up 0.4% YoY

• EBITDA: ₹16,700 crore, a decline of 4.1% YoY

• EBITDA Margin: 14%, down 60 basis points

• Dividend: ₹6 per share, subject to shareholder approval (mint, The Economic Times)

Despite the profit decline, the company declared a final dividend of ₹6 per share, reflecting confidence in its long-term prospects.(The Financial Express)

Segment Performance

Jaguar Land Rover (JLR)

JLR reported a revenue of £7.7 billion for the quarter, a 1.7% decrease YoY. However, profit before tax increased to £875 million from £661 million in the same period last year. The EBIT margin expanded by 150 basis points to 10.7%. Notably, Defender wholesales reached a record 115,404 units in FY25. (The Economic Times)

Commercial and Passenger Vehicles

The domestic market faced challenges, with the commercial vehicle segment experiencing a slow recovery and the passenger vehicle segment grappling with intense competition. The company continues to focus on electric and CNG vehicles to drive growth. (mint, India Today)

Analyst Recommendations

HSBC Securities

HSBC downgraded Tata Motors to 'Hold' from 'Buy', citing concerns over US tariffs and an aging JLR portfolio. The target price was raised to ₹770 from ₹700, reflecting a cautious optimism. (mint)

Jefferies India

Jefferies maintained an 'Underperform' rating, reducing the target price to ₹630. The firm highlighted challenges such as US tariffs, competition in China, and rising customer acquisition costs for JLR. Additionally, the domestic commercial vehicle demand has slowed, and competition in the electric passenger vehicle segment is intensifying. (mint)

Investment Outlook

Tata Motors' recent performance reflects the broader challenges in the automotive industry, including geopolitical tensions and shifting consumer preferences. While the company has made strides in reducing debt and focusing on electric mobility, near-term headwinds persist.

Buy: Investors with a long-term horizon may consider accumulating the stock on dips, banking on the company's strategic initiatives in EVs and global markets.

Hold: Current shareholders might opt to hold their positions, awaiting clearer signs of recovery and growth in key segments.

Sell: Those with a low-risk appetite or short-term investment goals may consider exiting, given the prevailing uncertainties and pressure on margins.