Shares of Tata Motors Passenger Vehicles Ltd (TMPV) surged 5.22 per cent on Friday to settle at Rs 356.55 after the company reported its March quarter (Q4 FY26) earnings yesterday, post market hours. Despite the latest rally, the stock has remained largely flat over the past year, declining 2.11 per cent during the period.

Mayuresh Joshi, Head of Equity Research at William O'Neil India, in an interaction with Business Today, said, "As newer models are introduced, the overall EV ecosystem is expected to become more efficient. Tata Motors continues to maintain a strong presence in the passenger vehicle (PV) segment, and any improvement in demand conditions or supportive industry measures could aid volumes going forward. This, in turn, may support the company's overall business performance and balance sheet dynamics."

Motilal Oswal Financial Services Ltd (MOFSL) said TMPV's Q4 profit after tax (PAT) at Rs 5,880 crore was significantly above its estimates, supported by stronger-than-expected performance from both the India business and Jaguar Land Rover (JLR).

"While Indian margins expanded 90bp YoY to 8.7 per cent (vs our estimate of 7 per cent), JLR EBIT margins sharply expanded from -6.8 per cent in Q3 to 9.2 per cent in Q4 due to improved volumes, higher product capitalisation, reduced depreciation, and benefit from forex gains (not quantified), even as gross margins declined QoQ," MOFSL stated.

However, the brokerage remained cautious on the stock's outlook.

"While the Indian PV demand outlook remains positive, it is expected to see margin pressure in the near term, given the material surge in input costs. Further, JLR continues to face multiple headwinds, both on the demand and cost front. While JLR has embarked on a major cost reduction initiative, it is likely to only help partially offset the current headwinds. Given the significant challenges at JLR and the continued geopolitical uncertainty, we reiterate our Sell rating on the stock with a SoTP-based TP of Rs 303 per share (based on FY28E). We value both JLR and India PV business at 2x and 13x EV/EBITDA, respectively," it added.

Elara Capital also maintained a cautious stance, retaining its 'Reduce' rating while trimming the target price to Rs 354 from Rs 363 earlier.

"Management is monitoring the situation and is refraining from aggressive price hikes for India PV, as it may impact demand in the near term. Given the muted global demand outlook at JLR and rising VME and commodity costs, we recommend Reduce, with SOTP-based TP pared to Rs 354 (earlier Rs 363)," Elara said.

In contrast, Nuvama Institutional Equities reiterated its 'Buy' call and raised the target price, citing recovery in the JLR business.

"We build in revenue/EBITDA CAGR for India PV at 19 per cent/36 per cent over FY26–28E driven by robust volumes, PLI benefits and better mix. Moreover, JLR revenue/EBITDA CAGR is at 16 per cent/55 per cent owing to low base, launches, better scale and cost savings. Retain 'BUY' with a SotP TP of Rs 470/share (earlier Rs 400) on 11x/2x EV/EBITDA for India PV/JLR and value of investments at Rs 56/share (earlier Rs 30)," it stated.

JM Financial upgraded the stock to 'Buy' from 'Reduce' and assigned a target price of Rs 415, citing attractive valuations and improving demand trends.

"We upgrade the stock from REDUCE to BUY, supported by: i) improving JLR demand outlook – stable trends in the EU/UK, growth potential in NA and resilient demand in the Middle East despite the conflict; ii) domestic demand momentum remains healthy with management guiding for ~10 per cent YoY industry growth in FY27; iii) a strong launch pipeline (JLR: Range Rover EV and two launches in H2FY27; domestic: Sierra EV in Jun'26, along with two new nameplates and four facelifts); and iv) lean dealer inventory across both JLR and domestic operations (~20 days)," JM Financial said.