Tata Motors Share Price Target 2025: TaMo Share Falls Amid JLR's Weaker Outlook – What Should Investors Do?

Shares of Tata Motors declined by over 1.55% on Tuesday on the National Stock Exchange (NSE). The stock plunged in the wake of its British luxury arm Jaguar Land Rover (JLR) presented a muted outlook for the financial year 2026. 

From the previous close of Rs 686.65, Tata Motors' stock fell to around Rs 676.00 apiece in intraday trade, as per NSE. 

Meanwhile, due to a weaker outlook for Jaguar Land Rover (JLR), Emkay Global has reduced its price target for Tata Motors to Rs 750 while maintaining a ‘Buy’ rating.

“Over the last 5 years, JLR has significantly strengthened its business profile (largely resilient volume, high profitability) and balance sheet (net cash), thus positioning itself well to withstand near-term challenges. We maintain BUY on TTMT (Tata Motors) while trimming out SoTP-based TP (Target Price) by ~6% to Rs 750,” Emkay stated in its report.

For the uninitiated, the sum-of-the-parts (SoTP) valuation is a method of valuing a company by separately assessing the value of each of its business segments or divisions and then summing those values to arrive at the company's total value. 

Also Read: Tata Motors' Share Price Falls Over 5% - Is JLR's Margin Warning to Blame? | Republic World

Trimmed forecast by JLR

At JLR’s recent Annual Investor Day, the company guided for £28 billion in revenue for FY26 with an EBIT margin of 5–7% — down from its earlier forecast of 10%, according to Emkay Global. For FY25, margins are estimated at 8.5%.

While JLR continues to aim for long-term margins of 10–15%, Emkay flagged near-term profitability concerns.

“It maintained its interim/long-term guidance of 10%/15%, led by sustained focus on premiumization (growing share of higher-priced models), pricing discipline, and structural cost reduction.,” the same report stated.

As per Emkay's analysis, Tata Motors' Free Cash Flow (FCF) for FY26 is expected to be close to zero, down from £1.5 billion in FY25, due to lower margins, working capital drag, and high investments. JLR plans to spend £3.8 billion in FY26 — similar to FY25, but slightly above previous guidance, as per the analysys of Emkay.

“FY26 FCF to be ‘close to zero’ vs £1.5bn in FY25 on lower profitability, drag from working capital, and sustained investment spends of £3.8bn (akin to FY25; previous guidance above £3.5bn),” added Emkay in its report.

Potential trade issues between the US, UK, and EU could also impact profitability in the first half of FY26, the report warned.

Realignment of EV strategy

Emkay also noted that JLR is adjusting its electric vehicle strategy due to slow BEV adoption and regulatory changes. While Jaguar will go fully electric, the Range Rover EV launch is now expected in 2026.

“Amid slower than anticipated BEV adoption and changing emission regulations, JLR is increasing investments in ICE, on extended visibility;Jaguar to be fully electric; Range Rover EV launch planned for CY26,” according to Emkay Global.

Meantime, Tata Motors-owned JLR is also investing more in internal combustion engines (ICEs) and next-gen Software-Defined Vehicles (SDVs) with next-general EV architecture, which could cut wiring costs and improve tech capabilities.

Despite challenges, JLR continues to outperform in China’s premium car market. However, Emkay has cut Tata Motors’ FY26 and FY27 earnings estimates by 15%, forecasting a 5% revenue drop and negative FCF of £528 million for FY26.

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