1:1 Split Soon: Tata's Auto Stock Gives ZERO Returns In April, Plans Rs 500 Crore NCDs; Q4, Dividend Ahead

Tata Motors Share Price: The Tata Group-backed automobile has continued to be in deep red even in overall April month. Going ahead, the May month is packed with Q4 results, dividend announcement, and fundraising plan. In fact, Tata Motors stock price will be in focus on May 2nd, as its board will consider non-convertible debentures worth Rs 500 crore. Ahead of its Q4 earnings, brokers have recommended BUY on Tata Motors, with target price averaging above Rs 800.

Tata Motors Share Price:

After market hours of April 30th, Tata Motors stock price dropped by 3.22% on BSE, to end at Rs 644.15 apiece. By end of April month, Tata Motors market cap is around Rs 2,37,134.08 crore.

Overall, the stock nosedived by 4.06% in the entire April 2025 month, hence, zero returns. In half-year performance, Tata Motors shares dropped nearly 22%. While year-to-date, the stock plunged by a little over 14%.

Tata Motors NCDs:

As per the regulatory filing, Tata Motors is looking to raise up to Rs 500 crore through issuance of Rated, Listed, Unsecured, Redeemable, and Non-Convertible Debentures on a private placement basis. A board meeting is scheduled on May 2, 2025, to consider the proposal.

Tata Motors Q4 Results:

The auto giant has fixed Tuesday, May 13, 2025, as the record date for considering and approval of Audited Financial Results (Standalone and Consolidated ) for the fourth quarter and financial year ending March 31, 2025 alongwith the Reports of the Auditors thereon.

For Q4FY25, Tata Motors is likely to witness a margin contraction of 120bps YoY, led by global headwinds impacting the JLR segment, as per Elara Capital's preview note.

While on standalone basis, Tata Motors is expected to see revenue decline of 5% yoy in 4QFY25 led by (1) 4% yoy decline in volumes and (2) 1% yoy decline in ASPs. Kotak Institutional Equities note added, overall, EBITDA margin is expected to increase by 90 bps yoy driven by commodity tailwinds and richer product mix.

Additionally, the brokerage predicts JLR volumes (excluding China JV) to decline by 3% yoy led by weakness in EU and China markets. Overall, the revenues (ex China JV) is expected to decline by 2% yoy in 4QFY25 driven by decline in volumes. Also, the brokerage expects ASP to increase by 1% yoy driven by richer model mix (higher mix of RR, RR Sport and Defender) offset by higher discounting and lower China mix.

Meanwhile, JLR's reported EBITDA margin is expected to decline by 60 bps yoy to 15.6% driven by negative operating leverage and higher VME & marketing spending. Overall, the expectation is that JLR's EBIT margin to come in at 10.7% in 4QFY25 (+150 bps yoy).

On a consolidated basis, Kotak expects domestic PV business EBITDA to improve to 7.7% (+40 bps yoy) in 4QFY25 driven by (1) richer product mix, (2) commodity tailwinds in EV segment due to decline in battery prices and (3) PLI accrual partly offset by higher discounts.

Tata Motors Dividend:

On May 13th, Tata Motors board will also consider a dividend, if any, on the Ordinary.
Shares of the Company for the financial year ending March 31, 2025, at the forthcoming 80th Annual General Meeting of the Company.

Since June 2003, Tata Motors has declared about 17 dividends, as per Trendlyne data. In the past 12 months, the company delivered a hefty Rs 6 per share dividend. Its current dividend yield is around 0.93%.

Tata Motors Split:

The company is on the journey to split its business. The company's demerger will be of two separate listed companies housing A) the Commercial Vehicles business and its related investments in one entity and B) the Passenger Vehicles businesses including PV, EV, JLR, and its related investments in another entity. As part of the demerger plan, Tata Motors shareholders will get 1 share of TMLCV with a face value of Rs 2 each for every 1 share held in the company. This makes the business split ratio 1:1.

As per reports, the demerger could come into effect in October this year.

BUY Tata Motors Share Price?

Elara Capital has recommended BUY on Tata Motors ahead of Q4 results. The target price is set at Rs 872.

The consensus recommendation from 30 analysts for Tata Motors Ltd. is BUY. The average 1-year target price is at Rs 811.70 apiece, signalling nearly 26% potential upside ahead.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.In advises users to consult with certified experts before making any investment decision.