TATAMOTORS - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.2

📊 Core Financials Analysis

Profitability & Returns

ROE: 28.1% and ROCE: 20.0% are strong — indicating efficient capital deployment and solid profitability.

EPS of ₹75.6 is robust, supporting the low P/E valuation.

PAT of ₹8,887 Cr. shows strong earnings, though the QoQ decline of 49.6% (from ₹5,424 Cr.) signals volatility, likely due to cyclical or one-off factors.

Debt & Liquidity

Debt-to-equity ratio of 0.62 is moderate — manageable but worth monitoring given the capital-intensive nature of the auto industry.

Dividend yield of 0.87% is modest, but acceptable for a growth-oriented stock.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 9.04 Deeply undervalued vs. industry PE of 31.6

P/B Ratio ~2.2 Reasonable given earnings strength

PEG Ratio 0.14 Extremely attractive — suggests undervaluation relative to growth

Intrinsic Value Likely above CMP Supported by strong earnings and growth metrics

🚗 Business Model & Competitive Advantage

Business Model: Tata Motors operates in passenger vehicles, commercial vehicles, and luxury cars (via Jaguar Land Rover).

Strengths

Diversified portfolio across segments and geographies.

Strong brand equity and innovation in EVs and connected mobility.

JLR turnaround and domestic demand recovery are key growth drivers.

Risks

Cyclical industry exposure.

Global macroeconomic factors and commodity price sensitivity.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹660–₹690 range is attractive, especially near 50 DMA and below 200 DMA.

Long-Term View

Strong buy for long-term investors seeking value and growth.

Ideal for those bullish on EV adoption, JLR recovery, and India’s auto cycle.

Hold for multi-year compounding potential.

Would you like a side-by-side comparison with Mahindra & Mahindra or Maruti Suzuki to assess sector positioning?

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