Tata Motors Shares in Focus: Amid Posting Positive Business Outlook for FY27

On Monday, June 9, 2025, Tata Motors shares saw an uptick on following the company’s presentation of its strategic outlook across its commercial, passenger, and electric vehicle segments at its investor and analyst meet.

Commercial Vehicle Segment: Ambitious 2027 Targets

Tata Motors has set a goal to capture a 40% market share in the commercial vehicle (CV) segment by 2027, a significant increase from its current 33.5%, representing a growth of 650 basis points. Alongside this, the company aims for EBITDA margins to reach the teens percentage range.

The automaker also outlined its capital expenditure plans, estimating it to be 2% to 4% of revenue. Additionally, Tata Motors anticipates free cash flow to range between 7% and 9% of revenue, with a focus on maintaining a high return on capital employed (RoCE) and reducing segment volatility by 2027.

Passenger Vehicle Business: Modest Growth in FY26

For the fiscal year 2026, Tata Motors projects muted demand growth in its passenger vehicle (PV) segment. The company highlighted a continuing shift towards SUVs, persistent high competitive pressures, and limited flexibility to adjust pricing within this segment.

Furthermore, Tata Motors cautioned that ongoing global trade uncertainties may lead to continued market volatility throughout FY26.

Long-Term Passenger Vehicle Strategy (FY26-30)

Looking ahead to the period from FY26 to FY30, Tata Motors expects its passenger vehicle volume growth to outpace the overall market. The company is targeting a 16% market share by FY27, marking an increase of about 310 basis points from the current 12.9%.

This growth projection factors in an electric vehicle market share expected to hover between 18% and 20% over the next two to three years. The company also aims to achieve double-digit EBITDA margins during this period.

Also Read: May 2025 Auto Sales: Tata Motors, Maruti Suzuki, M&M Shares in Focus

Electric Vehicle Segment: Strong Growth and Funding Outlook

Tata Motors projects electric vehicles (EVs) will constitute 20% of its total sales by FY27, rising to over 30% by FY30. The company expects positive EBITDA from the EV business to continue and improve through FY26- 30.

However, Tata Motors warns that free cash flow in the EV segment is likely to remain negative in the medium term, even though the business is well-capitalised for the next three years.

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