Tata Motors Group Q3 FY25 Stock Research Report
Value Pick multibagger stock for long term investments
1. Executive Summary
Tata Motors Group (NSE: TATAMOTORS) delivered a strong Q3 FY25 performance with ₹113,575 Cr in revenue and a consolidated EBITDA margin of 13.7%. Despite global economic challenges, Tata Motors remains on track for a strong full-year performance.
Market Stats
Market Cap: ₹2,56,519 Cr
Current Price: ₹697
52-Week Range: ₹683 – ₹1,179
Stock P/E: 8.06
Book Value: ₹275
Financial Ratios
Dividend Yield: 0.43%
ROCE: 20.1%
ROE: 49.4%
Debt: ₹1,06,549 Cr
Reserves: ₹1,00,326 Cr
Growth Metrics
Sales Growth (YoY): 4.53%
Profit Growth (YoY): 57.9%
Sales Growth (3Y Avg): 20.6%
Profit Growth (3Y Avg): 128%
Promoter Holding: 42.6% (-3.83% over 3Y)
2. Q3 FY25 Financial Performance
Consolidated Highlights
Revenue: ₹113,575 Cr (+2.7% YoY)
EBITDA Margin: 13.7% (+60 bps YoY)
PBT (before exceptional items): ₹7,700 Cr
Net Auto Debt: ₹19,200 Cr (down from ₹29,200 Cr YoY)
Free Cash Flow (Automotive): ₹4,700 Cr
Segment-Wise Performance
Jaguar Land Rover (JLR)
Revenue: £7.5B (+2% YoY)
EBIT Margin: 9.0%
PBT: £523M (-17% YoY)
ROCE: 19.6%
Net Debt: £1.1B
Electrification: 80% new vehicles
Commercial Vehicles (CV)
Revenue: ₹18,431 Cr (-8.4% YoY)
EBITDA Margin: 12.4% (+130 bps YoY)
PBT: ₹1,726 Cr
ROCE: 38.1%
Passenger Vehicles (PV & EV)
Revenue: ₹12,354 Cr (-4.3% YoY)
EBITDA Margin: 7.8% (+120 bps YoY)
PBT: ₹292 Cr
EV EBITDA Margin: 10.0%
EV Market Share: 35%
3. Future Growth Plans & Expansions
Capital Expenditure & Strategic Rationale
FY25 CAPEX Target: ₹3.8B (~₹32,000 Cr)
JLR Investment: £1B in Q3 FY25; £3.8B target for FY25
Tata Motors Domestic Investments: ₹2.0K Cr in Q3 FY25
Focus on Electrification & Digitalization
- First electric Jaguar GT launch in late 2025
- Expanding EV and hydrogen-powered commercial vehicle portfolio
- Tata.ev charging network expansion
- “Mileage Sarathi” AI for fleet fuel efficiency
- Smart City Mobility with e-buses across major Indian cities
Demerger of Commercial & Passenger Businesses
Appointed Date: July 1, 2025
Effective Date: Expected in Oct-Dec 2025
Strategic Rationale: Enables focused capital allocation and growth in respective segments
4. Competitive Landscape & Risks
Competitive Strengths
- JLR’s “House of Brands” strategy
- Strong product lineup across segments
- Robust demand for flagship models
- Market leadership in India’s EV segment
Key Risks
- Macroeconomic Slowdown
- Foreign Exchange Volatility
- China Demand Uncertainty
- EV Infrastructure Bottlenecks
- Regulatory Risks
5. Valuation & Investment Thesis
Valuation Estimates
Price-to-Earnings (P/E) Ratio: 8.06 (Industry Avg: ~15)
EV/EBITDA: ~6.5x (Discount to peers)
Price-to-Book (P/B) Ratio: 2.53
Implied Fair Value Range: ₹850 – ₹1,050
Upside Potential: ~20-50% from current ₹697 price level
Investment Thesis
- Strong growth momentum in JLR, CV, and EV segments
- Aggressive deleveraging & improving cash flows
- High ROE (49.4%) and ROCE (20.1%) indicate strong profitability
- Well-positioned to benefit from EV & hydrogen adoption
Investment Recommendation
BUY with a 12-month target of ₹900+
6. Conclusion
Tata Motors continues its strong growth trajectory, backed by JLR’s record profitability, solid CV margins, and expanding EV adoption. The ongoing demerger and deleveraging will unlock further value for investors. However, global macroeconomic risks and regulatory headwinds must be monitored.
Disclaimer: This report is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence before making any investment decisions.
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