Tata Motors PV: India EV resurgence; addressing white spaces at JLR
Rating: ACCUMULATE: Target Price: INR 338, Upside: 18%, CMP: INR 286 (as on 13 October26)
MUMBAI, 14 OCTOBER: The Indian PV EV market has hit an inflection point, with BEV penetration rising a staggering 260bps YoY to 7.6% YTDFY27. TMPV India BEV is a one of the key beneficiary with a ~40% market share as on YTDFY27. Further, BEV contribution to domestic volumes is the highest at 22% for TMPV India versus other listed peers at ~1-12%. We believe market share may be resilient even in FY28-29 on increasing BEV penetration in India.
For JLR, Q2FY27 wholesales rose 25% YoY and ~4% QoQ, with Range Rover, Range Rover Sport and Defender mix improving to 77.6% of wholesales (76.7% in Q2FY26). While volumes are below historical levels, management’s focus on ASP, mix and profitability aligns with current market dynamics. Ongoing BEV launches should address white spaces for EVs in Europe, where JLR had no presence and where BEV penetration reached ~29% in August 2026. In the US, the non-binding Stellantis MoU could help plug white spaces in the next 2-3 years (not in our estimates). The EU’s import quota on Chinese imports (also possibility of UK tariffs on Chinese imports) should ease some strain on JLR and help it defend share in the UK and the EU. We upgrade Tata Motors (TMPV IN) to Accumulate (from Reduce), with TP lowered to INR 338 (from INR 351) as we roll forward to FY29E.
India PV – EV leadership to aid industry outperformance: TMPV India BEV is a key beneficiary of the recent resurgence in EVs, with a ~40% market share. Further, BEV contribution to domestic volumes is the highest at 22% for TMPV India vs. other listed peers at ~1-12%. We believe market share should be resilient even in FY28-29 on increasing BEV penetration in India. EVs remain margin-dilutive initially, but we see them building a multi-year moat. Further, Stellantis and TMPV signed a definitive agreement, under which TMPV will give Stellantis access to its product technology and vehicle architecture. Stellantis will adapt these for 50+ global markets using its Indian engineering base, with the vehicles built at their 50:50 JV, FIAPL, to boost India-based exports and could unlock further upside to our estimates, though only in FY29E.
JLR – BEV launches, Stellantis partnership to address white spaces in US, Europe: JLR’s mix continue to be healthy. The Stellantis MoU for US-specific Defender-branded vehicles is an optionality and plugs whitespaces. Six new BEVs in 12-18 months close JLR’s product gap in Europe (BEVs form ~29% of overall market where JLR has no presence). The EU placing quota on Chinese import is incrementally positive, but Chinese OEMs increasingly setting up capacity in Europe could offset this (refer ‘The Curious Case of JAECOO – 7 and EV Adoption: The resurgence – we highlighted concerns around Chinese OEMs gaining share in Europe). That said, we build in a conservative 7.3% EBIT margin for FY29E (FCF slightly positive), in line with margin trajectory outlook of global peers.
Upgrade to Accumulate; TP pared to INR 338: The stock has corrected ~29% since 30 June 2026, underperforming Nifty Auto (which corrected 5%), factoring in most negatives at JLR and margin strain in India business. We lower FY27E-29E earnings estimates by 7-11%, factoring in slightly lower margin at JLR and India PV business. So, we trim our SOTP-TP to INR 338 (from INR 351). We value JLR at 2.0x FY29E adjusted EV/EBITDA (retained; Porsche at 6.5x, BMW at 1.5x, Mercedes at 1.4x), and India PV at 10x FY29E EV/EBITDA, as we roll forward to FY29E. Revise to Accumulate from Reduce.
(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)
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