JLR reports strong wholesales growth in Q3: Should you buy, hold or sell Tata Motors shares?

Tata Motors shares in Thursday's session after initial gains in intraday trade were trading lower by as much as 1.62 per cent or Rs 12.85 at Rs 782 apiece on the BSE. The company's wholly owned subsidiary - Jaguar Land Rover on Wednesday released its sales report for the December quarter of fiscal year 2024-2025.

For the review quarter, JLR reported increased wholesale volumes, reflecting an improvement following supply disruptions in the second quarter of FY25. Wholesale volumes for Q3 came in at 104,427 units (excluding the Chery Jaguar Land Rover China JV), up 3 per cent compared to the same quarter a year ago and up 20 per cent compared to the prior quarter ended 30 September 2024.

Retail sales, however, logged a 3 per cent decline year-on-year to 106,334 units, while the same surged 3 per cent in comparison to the previous quarter.

"The overall mix of the most profitable Range Rover, Range Rover Sport and Defender models increased to 70 per cent of the total wholesale volumes. During the quarter, demand for Range Rover was particularly strong with wholesale volumes up 48 per cent compared to Q2 FY25, partly due to the resolution of temporary supply chain disruptions, but also up 22 per cent compared to the same quarter a year ago, representing continued strong demand," said the company's press release.

Should you buy, sell or hold Tata Motors shares?

Global brokerage UBS has continued with its 'sell' rating on the stock with the target pegged at Rs 780, implying a potential downside of 2 per cent. As per the brokerage, the auto major now looks on track to meet EBIT margin guidance of more than or equal to 8.5 per cent as against UBS' estimates of 8.3 per cent. The global brokerage added that the improvement in overall mix is better than its estimates and we might see healthy QoQ growth in the average selling price (ASP).

Nonetheless, UBS sees sharp downside risks to the company's FY26 guidance of over 10 per cent EBIT margins.

Meanwhile, another foreign brokerage Morgan Stanley has reiterated its 'equal weight' call on the stock with a target of Rs 920. The set target price implies potential gains of around 16 per cent. The brokerage noted that JLR reported F3Q25 wholesale volume growth of 3 per cent year-on-year (YoY) to  104,427 units, 2 per cent ahead of its estimates. The brokerage estimates JLR to post an EBIT margin of 9.6 per cent.

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