Tata Motors has been the talk of the financial market after its share price dipped 3% following Jaguar Land Rover’s (JLR) Q3 FY25 numbers. The mixed bag of results showcased wholesale growth of 3% year-on-year (YoY), while retail sales fell by an equal margin. So, what’s the bigger picture here? Let’s break it down.
JLR Q3 FY25 performance: A tale of two stories
Wholesale growth paints a strong recovery
JLR reported wholesales of 104,427 units for Q3 FY25, up 3% YoY. This growth signifies recovery after supply disruptions in Q2 FY25. Sequentially, the numbers reflect a robust 20% jump, signaling better inventory management and demand stabilization.
- North America led the charge with a staggering 44% growth, followed by Europe at 6% YoY.
- However, declines were noted in China (-38%), the UK (-17%), and Overseas markets (-1%).
Year-to-date (YTD) wholesales totaled 289,485 units, reflecting a slight 1% decline compared to the same period last year.
Also read: Tata Motors’ arm reports 3% fall in retail sales in Q2FY25
Retail sales take a hit
Contrary to wholesale growth, retail sales of 106,334 units for Q3 FY25 dipped 3% YoY. On a sequential basis, however, retail sales grew by 3% compared to Q2 FY25, showing marginal recovery.
The YTD retail numbers stood at 320,622 units, up 1% YoY, showcasing resilience despite market headwinds.
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High-margin models drive profitability
JLR’s flagship models—Range Rover, Range Rover Sport, and Defender—emerged as strong performers, accounting for 70% of total wholesale volumes.
- The Range Rover witnessed 22% YoY growth and an impressive 48% sequential growth.
- The Range Rover Sport grew by 17% YoY, while the Defender rose by 13% YoY.
This high-margin mix adds a layer of optimism, even as other areas lagged.
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Analyst opinions: Mixed signals
Analysts at Motilal Oswal Financial Services (MOFSL) highlighted persistent concerns such as weak demand in key markets, cost pressures, and potential margin challenges driven by:
- Increased investments in demand generation.
- EV adoption, which may initially dilute margins.
- Normalizing product mix.
Despite these hurdles, Tata Motors’ JLR segment remains pivotal, supported by strong demand for luxury models and gradual stabilization in supply chains.
Stock performance: Recent trends
The Tata Motors share price opened at ₹798.95 on Thursday, slightly higher than the previous close of ₹794.85. However, it soon dipped to ₹769.66, reflecting the 3% drop post Q3 results.
- The stock is down 21% over the past six months, but it has seen a stellar 108% growth over the last two years.
- The company’s market capitalization stands at ₹2,92,594 crore.
Key drivers for Tata Motors’ future
1. Upcoming Q3 results announcement
The board meeting for Tata Motors’ Q3 FY25 results is scheduled for January 29, 2025. Investors will closely monitor margin trends and future guidance.
2. Business demerger plans
Tata Motors has announced a 1:1 demerger to separate its Commercial Vehicles (CV) and Passenger Vehicles (PV, including JLR and EVs) businesses. This move could unlock value for shareholders and provide better focus on segment-specific growth.
3. Range Rover demand
The continued strong demand for high-margin models like Range Rover will be a critical factor in sustaining profitability.
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Should you buy Tata Motors stock?
According to Trendlyne, the average target price for Tata Motors is ₹959, reflecting a 21% upside from current levels. However, analysts are divided:
- Sharekhan recommends a BUY with a target price of ₹1,099, citing strong demand recovery and demerger plans.
- MOFSL highlights challenges like rising costs and muted demand, urging caution despite the stock’s correction from its peak.
Value insights from Tata Motors’ Q3 FY25 performance
| Metric | Value |
| Q3 FY25 Wholesales | 104,427 units (+3% YoY) |
| Q3 FY25 Retail Sales | 106,334 units (-3% YoY) |
| YTD Wholesales | 289,485 units (-1% YoY) |
| YTD Retail Sales | 320,622 units (+1% YoY) |
| Range Rover Growth (YoY) | 0.22 |
| Target Price (Sharekhan) | ₹1,099 |
| Current Market Cap | ₹2,92,594 crore |
The takeaway
Tata Motors’ JLR Q3 FY25 results are a mix of positives and challenges. While wholesales highlight recovery and robust demand for high-margin models, retail declines and regional disparities raise questions about market dynamics. The upcoming financial results and demerger plans could provide a clearer picture.
For now, the decision to buy, hold, or sell depends on your risk appetite and long-term view of Tata Motors’ evolving business strategy.
