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Brokerages have mixed views on Tata Motors, post its analyst meet. While analysts believe the company will benefit from the potential acquisition of Iveco and the support from goods and services tax (GST) reforms, concerns persist around the near-term demand outlook for Jaguar Land Rover (JLR) across Europe, China, and the US.

Brokerages target and rating on Tata Motors

Emkay Global Financial Services has maintained a ‘Buy’ rating on Tata Motors for a target of ₹750 per share. Nuvama Institutional Equities has retained a ‘Reduce’ rating with a target of ₹680 per share. Besides, Motilal Oswal has reiterated a ‘Neutral’ rating with a target of ₹686 per share. 

Brokerage’s takeaway from Tata Motors analysts meet: 

Iveco acquisition:

Emkay believes the potential acquisition of Iveco could significantly scale up Tata Motors’ commercial vehicle (CV) business, with South America (SA) revenues potentially expanding to ₹2 trillion from the current ₹7,000 crore. Iveco commands a 9 per cent share in Europe’s Light Commercial Vehicle (LCV) and 13 per cent in the Medium and Heavy Commercial Vehicle (M&HCV) markets, making the deal strategically attractive. 

Nuvama also views the acquisition to be earnings per share (EPS) accretive initially becoming meaningfully accretive within two years. The Iveco (ex-defence) buyout is valued at 2x CY24 EV/Ebitda, with an equity value of EUR 3.8 billion, and is expected to close by April 2026.

 

Synergies from the acquisition are projected from FY28, driven by an expanded product portfolio, new entries into Europe and Latin America, and leveraging Tata Motors’ strong position in India, said Emkay. 

 

Further, free cash flow (FCF) synergies are projected at 0.5 per cent of combined revenue from FY28, with management drawing comfort from Iveco’s healthy FCF of ₹300 crore in CY24.  ALSO READ| Want more retail investors in Tata Capital story: MD & CEO Rajiv Sabharwal

However, analysts caution that the acquisition entails key challenges:

Geographic shift: Global revenue mix could rise to 65 per cent against 10 per cent now, given Iveco derives 75 per cent of sales from the structurally low-growth and cyclical European market.

 

Margin pressure: Iveco's lower profit margins (5.3 per cent Earnings before interest and tax EBIT) compared to Tata Motors' (8.7 per cent) could reduce Tata Motors' overall margins in the medium term. 

Leverage impact: South America's net debt-to-equity could rise to 0.6x from 0.1x, as management has indicated 60 per cent debt financing for the deal, however, this is manageable, according to analysts.

 

Integration risk: Absorbing Iveco could strain management bandwidth and distract from ongoing priorities.

JLR outlook:

According to Nuvama, post-production shutdown from cyber-attack in September 2025, JLR will resume manufacturing in a controlled and phased manner in the coming days. It continues to work alongside cybersecurity specialists, the UK government’s NCSC, and law enforcement. The company is conducting a forensic study to ascertain the comprehensive impact.

 

That said, the demand outlook remains challenging in Europe, China, and the US in the near term.

GST reforms impact:

For the Indian passenger vehicle (PV) industry, the GST cut will aid affordability and improve the H2FY26 outlook to 6–8 per cent. For CV, the GST reforms will support consumption demand and freight availability for transporters, leading to a pickup in H2FY26 growth outlook to high single digit, Nuvama noted. 

 

Management expects compact sport utility vehicles (SUVs), micro SUVs, and hatchbacks to do well. Hatchback demand shall improve with a shift in consumer preferences from used to new vehicles. Tata Motors is aiming to outpace industry growth, according to analysts. 

Demerger timeline:

The effective date for the demerger is October 1, 2025. Once all approvals are in place, the PV entity will be listed first, possibly in October, which will be followed by the listing of its CV entity (likely to be in November), subject to completion of all pending formalities, Motilal Oswal noted.

CNG adoption:

Tata Motors management highlighted that CNG now contributes over 20 per cent of total industry volumes, with adoption gaining significant traction in the compact SUV segment. The Nexon CNG has been at the forefront of this trend, reinforcing Tata Motors’ strong positioning in the CNG category.

 

Looking ahead, the company expects a material shift in the domestic PV powertrain mix by CY2030: CNG: 25 per cent

• EV: 20 per cent
• Diesel: 5 per cent
• Petrol: 50 per cent

 

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Ashnisha Industries	6-Oct-25	Right Issue of Equity Shares	6-Oct-25
CyberTech Systems and Software	6-Oct-25	Special Dividend - ₹20	6-Oct-25
Julien Agro Infratech	6-Oct-25	Bonus issue 1:1	6-Oct-25
Sigma Solve	6-Oct-25	Stock Split From ₹10/- to ₹1/-	6-Oct-25
Sayaji Industries	7-Oct-25	Bonus issue 3:1	7-Oct-25
AGI Infra	10-Oct-25	Stock Split From ₹ 5/- to ₹1/-	10-Oct-25
Hexaware Technologies	10-Oct-25	Interim Dividend - ₹5.7500	10-Oct-25
Narmada Macplast Drip Irrigation Systems	10-Oct-25	Bonus issue 1:1	10-Oct-25
Narmada Macplast Drip Irrigation Systems	10-Oct-25	Stock Split From ₹10/- to ₹2/-	10-Oct-25
Rashtriya Chemicals and Fertilizers	10-Oct-25	Final Dividend - ₹1.32	10-Oct-25
Ashnisha Industries	6-Oct-25	Right Issue of Equity Shares	6-Oct-25
CyberTech Systems and Software	6-Oct-25	Special Dividend - ₹20	6-Oct-25
Julien Agro Infratech	6-Oct-25	Bonus issue 1:1	6-Oct-25
Sigma Solve	6-Oct-25	Stock Split From ₹10/- to ₹1/-	6-Oct-25
Sayaji Industries	7-Oct-25	Bonus issue 3:1	7-Oct-25