Tata Motors CV shares downgraded, target cut amid fuel, commodity cost concerns

Shares of Tata Motors’ commercial vehicles (CV) business are trading lower on Thursday, May 14, despite reporting a strong set of quarterly earnings. Management commentary and brokerage views remained cautious on the near-term outlook.Brokerage firm Nomura downgraded the Tata Motors CV business to ‘Neutral’ and cut its price target to ₹402 from earlier levels, implying a potential upside of around 4.5% from the current market price.

Nomura cited risks from weak demand trends at IVECO, rising fuel prices and increasing commodity costs for the Indian commercial vehicle industry.
The brokerage also flagged war-related uncertainties as a potential risk to demand.For Q4FY25, Tata Motors’ CV business reported a 19% year-on-year rise in revenue to ₹26,098 crore, while EBITDA surged 37% to ₹3,327 crore.
EBITDA margin expanded to 12.8% from 11.1% a year ago, aided by improved realizations and higher volumes. Volumes grew 25.4% year-on-year and 14.6% sequentially, while domestic market share improved to 36.5% from 35.5%.The CV segment’s EBITDA margin came in at 13.2%, slightly below Nomura’s estimate of 13.4%.

Management expects high single-digit growth in Q1FY27 but cautioned that commodity headwinds are likely to remain elevated during the quarter.

The company also indicated that it may not fully pass on raw material cost increases to customers.

Margin guidance has now been revised to “teens” from the earlier “mid-teens” outlook. Tata Motors also highlighted reduced availability in Sri Lanka impacting its international business.

The stock currently trades at 10.6x FY28 estimated EV/EBITDA, according to Nomura.

Tata Motors CV shares ended 0.61% lower at ₹384.70 on Wednesday and are down 10% so far this year.