Tata Motors share price has four downside risks, HSBC warns ahead of JLR investor day
Published on 12/06/2025 10:37 AM
Tata Motors share price has four downside risks, HSBC warns ahead of JLR investor dayOut of the 35 analysts that have coverage on Tata Motors, 18 of them have a "buy" rating, 11 say "hold", while six have a "sell" recommendation.By Hormaz Fatakia June 12, 2025, 10:37:07 AM IST (Published)2 Min ReadTata Motors Ltd. has four downside risks, ranging from a strengthening local currency to higher discounts, brokerage firm HSBC has warned in its latest note on the passenger and commercial vehicles manufacturers.
HSBC has a "hold" recommendation on Tata Motors with a price target of ₹770, which implies a potential upside of 5% from Monday's closing levels.
Among the key risk factors highlighted by HSBC include:
An appreciating British Pound against the US Dollar. For every 1% appreciation in the Sterling, Jaguar Land Rover's (JLR) margins could be hit by 20 basis points.
Unexpected design faults in new models could hurt brand perception and sales.
A larger-than-expected incentives in key markets like the US, Mainland China and Europe, could also dent JLR's margins. Jaguar Land Rover, Tata Motors' UK unit, will be holding its investor day on June 16, to share its outlook for the current year.
Lastly, low acceptance of the upcoming battery electric vehicles (BEVs) within the Range Rover, particularly in the Jaguar brands could hurt volumes, and therefore, profitability.
HSBC is valuing Tata Motors' Commercial Vehicles business at a 15% discount in comparison to Ashok Leyland due to a loss in market share and a weak margin profile. On the other hand, the Passenger Vehicle business is being valued by HSBC at a 20% discount to the segment leader, Marui Suzuki.
An elongated pricing discipline in global premium markets could improve margins for Tata Motors, while a steep decline in CNG prices could lead to an increase in Passenger Vehicle volumes, according to HSBC.
Out of the 35 analysts that have coverage on Tata Motors, 18 of them have a "buy" rating, 11 say "hold", while six have a "sell" recommendation.
Shares of Tata Motors are currently trading 1% lower at ₹728.65. The stock remains flat over a one month and year-to-date period.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!Tagsshare market todayTata MotorsTata Motors share priceTata Motors shares