Motilal Oswal Financial Services (MOFSL) has released its latest analyses and target prices for several prominent Indian stocks, including Power Finance Corporation (PFC), Tata Motors, MTAR Technologies, Jindal Steel & Power, and TVS Motor Company. The brokerage firm maintains a 'Buy' rating on most of these stocks, anticipating potential upsides ranging from 17% to 21%.
The sole exception is Tata Motors, for which MOFSL has assigned a 'Neutral' rating, citing specific financial and market dynamics.
TVS Motor Company Ltd: Strong Outperformance Expected
MOFSL noted that TVS Motor Company's Q4 PAT aligned with estimates, with the EBITDA margin remaining stable at 13.1% quarter-on-quarter. The stability was attributed to an improved product mix and favorable currency movements offsetting cost pressures. MOFSL projects a revenue, EBITDA, and PAT CAGR of 16%, 19%, and 21% respectively, over FY26-28E. The brokerage highlights TVS's consistent market share gains in both domestic and export segments, coupled with gradual margin improvements, as key drivers for healthy returns. With a robust new launch pipeline, MOFSL expects this outperformance to continue, sustaining premium valuations. The 'Buy' rating is reiterated with a target price of Rs 4,267, valuing the stock at 35x FY28E EPS.
Power Finance Corporation Ltd (PFC): Operational Weakness Amid Asset Quality Improvement
PFC delivered an operationally weak quarter, according to MOFSL. While earnings surpassed expectations due to provision write-backs, loan growth remained subdued. Asset quality showed improvement, aided by resolutions of Sinnar thermal and TRN Energy, which led to the write-backs. However, Net Interest Margins (NIMs) saw a decline, driven by yield compression from increased competition and higher incremental borrowing costs due to forex market volatility. MOFSL maintains a 'Buy' rating on PFC with a target price of Rs 525, indicating an 18% upside potential. The firm has not factored in the proposed merger, anticipated to be effective from April 1, 2027, into its current estimates due to limited clarity on structure and financial implications.
Tata Motors Ltd: Neutral Outlook on Revised Growth Forecasts
Tata Motors' Q4 PAT fell below MOFSL's estimates, primarily due to lower-than-expected other income, although operational performance met expectations. The EBITDA margin expanded by 130 basis points year-on-year to 13.9%, benefiting from operating leverage. However, MOFSL has turned cautious on the demand outlook for the domestic Commercial Vehicle (CV) industry, citing ongoing geopolitical dynamics and their potential impact on the Indian economy, along with likely near-term margin pressure. Consequently, the brokerage has lowered its growth forecast for Tata Motors' CV volumes to a 6% CAGR over FY26-28E (from 8% previously). Given its current valuation at 20.8 times FY27, MOFSL suggests a 'Neutral' rating with a target price of Rs 414 per share.
MTAR Technologies Ltd: Strong Q4 Performance and Enhanced Growth Visibility
MTAR Technologies showcased a strong Q4 performance, with revenue and EBITDA increasing by 67% and 81% year-on-year, respectively, largely driven by its fuel cells division. The company's order book grew 2.7 times year-on-year, reflecting robust inflows in the fuel cells segment. Management has once again raised its FY27 revenue growth guidance to 80% with EBITDA margins projected at 24%, indicating sequential margin improvement. MOFSL has consequently raised its FY27E/FY28E earnings estimates by 5% and 11%, respectively, attributing this to strong growth visibility and improving margins. The 'Buy' rating is reiterated with a target price of Rs 8,000.
Jindal Steel & Power Ltd: Capacity Expansion Driving Future Growth
Jindal Steel has successfully completed its 6mtpa expansion at Angul, boosting its crude steel capacity to 12mtpa at the location and increasing its total capacity. This expansion positions Jindal Steel as India's fourth-largest steel producer. Supported by this incremental capacity and improving domestic demand, MOFSL anticipates a 17% CAGR in volume for the steelmaker. Coupled with steady Net Sales Realization (NSR) growth and an expanding value-added portfolio, revenue is projected to witness a 21% CAGR over FY26-28. Jindal Steel has also reduced its net debt, maintaining a net debt-to-EBITDA ratio of 1.7 times as of FY26. With strong earnings, MOFSL expects the company to generate an operating cash flow of Rs 25,000 crore over FY27 and FY28, comfortably funding its ongoing and proposed capital expenditure while adhering to its net debt-to-EBITDA threshold. MOFSL recommends a 'Buy' rating with a target price of Rs 1,450, suggesting a 17% upside potential.
Disclaimer: This article provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.