Tata Motors PV shares rally 8% even as Q4 net profit drops 32% YoY. Here's what Macquarie, Jefferies & other brokerages say

Tata Motors Passenger Vehicles (TMPV) jumped more than 8% on Friday after the automaker reported a 32% year-on-year (YoY) decline in its consolidated net profit at Rs 5,783 crore for the fourth quarter of FY26, from Rs 8,470 crore in the year-ago period, with some brokerages continuing to remain bullish, while others remain cautious.

While the company on Thursday reported a sharp decline in its bottom line, its revenue from operations rose more than 7% to Rs 1.05 lakh crore in the January-March quarter of FY26, from Rs 98,377 crore reported in the corresponding quarter of the previous financial year.

Along with the Q4 results, Tata Motors PV announced that its board of directors has recommended a final dividend of Rs 3 per equity share (150%) with a face value of Rs 2 each for the financial year 2026. The payout, however, is subject to shareholders' approval at its upcoming AGM. If approved, the dividend will be paid to the eligible shareholders on or before July 14 this year.

Tata Motors PV shares jumped over 8% to trade at Rs 366.95 apiece on NSE in the early trading hours of Friday.

Jefferies On Tata Motors PV

Jefferies kept an 'Underperform' rating on the shares of Tata Motors PV, while reducing the target price to Rs 300 apiece. This implies a downside of more than 11% from the stock’s previous closing price.

The international brokerage said the company’s earnings were sequentially better, but JLR concerns remain. EBITDA saw a big QoQ improvement and was 23% above estimates on better JLR and India margins, it added. While Jefferies noted that the cyberattack impact at JLR is behind, it still sees multiple headwinds at JLR.

Jefferies named increased competition and consumption tax in China, and high discounts & warranty cost, along with ageing key models, as the major headwinds for JLR. India PV is performing well but is unlikely to offset the JLR drag, it added.

Macquarie On Tata Motors PV

Macquarie maintained a ‘Neutral’ rating on the shares of Tata Motors PV, with a target price of Rs 367 apiece, implying an upside potential of more than 8%. It said that margins surprised positively, improving across both businesses

While the international brokerage highlighted that it was upbeat on domestic growth, it noted persisting margin risk. Margin surprise to aid near-term stock performance, it added.

Emkay on Tata Motors PV

Emkay retained its 'Add' rating on the shares of Tata Motors PV, with a target price of Rs 440 apiece, implying an upside potential of nearly 30% from the stock’s previous closing price of Rs 338.75 apiece on NSE.

The brokerage highlighted that the Tata Group company continues to demonstrate resilient performance in the domestic passenger vehicle segment, along with a strong recovery in Jaguar Land Rover (JLR), ET Now reported. It is, however, noted that commodity cost pressures are expected to persist, with the management guiding for a 3.5–4% impact in Q1 FY27.

Citi On Tata Motors PV

Citi, meanwhile, maintained its ‘Sell’ call on the shares of Tata Motors PV, and reduced its target price to Rs 330 apiece. It said that Q4 results were above estimates, but JLR margins face headwinds.

It added that India's PV business saw healthy demand, and management has guided to 10% year-on-year growth in industry volumes. However, it is not certain on the sustainability of margins for JLR, where hedging gains were the key driver of the EBITDA beat.

JM Financial on Tata Motors PV

JM Financial upgraded the shares of Tata Motors PV to ‘Buy’ from ‘Reduce’, and increased its target price by 27% to Rs 415 apiece. This implies an upside potential of more than 22% from the stock’s previous closing price.

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The domestic brokerage said that the turnaround at JLR post the cyberattack drove Q4 FY26 EBIT margin to 9.2% (+1,600bps QoQ), which was 590 bps above its estimate, led by operating leverage. “We upgrade the stock from REDUCE to BUY, supported by: i) improving JLR demand outlook, ii) domestic demand momentum remains healthy, iii) a strong launch pipeline, and iv) lean dealer inventory across both JLR and domestic operations,” it added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)