Tata Motors Stock Price Drops 7% Following Strong Q4 Earnings

Tata Motors Q4 Results 2026: Shares Tank as Market Hesitates on Growth Outlook

Tata Motors shares plummeted over 7% on Thursday, 14 May, despite the commercial vehicle maker reporting a robust set of earnings for the January-March quarter of FY26. The stock dropped as much as 7.2% to its day's low of ₹367.55 from its intraday high of ₹396.30 apiece on the BSE.

The demerged Tata Motors entity posted a significant 69.56% year-on-year rise in standalone net profit to ₹2,406 crore for Q4FY26, compared with ₹1,419 crore in the corresponding quarter last year. Revenue for the quarter increased 22% year-on-year to ₹24,452 crore, while EBITDA climbed 35% year-on-year to ₹3,400 crore. The company reported an EBITDA margin of 13.9%, up 130 basis points year-on-year and ahead of its medium-term guidance.

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Tata Motors attributed its record performance in Q4FY26 and strong full-year showing to disciplined execution and continued focus on profitable growth. The company's Board of Directors also recommended a final dividend of ₹4 per equity share with a face value of ₹2 each for the financial year ended March 31, 2026. The dividend, subject to shareholder approval at the AGM, will be paid to eligible shareholders on or before July 2, 2026.

Motilal Oswal Financial Services (MOSL) reiterated its 'Neutral' rating on Tata Motors with a target price of ₹414 per share after the company's Q4FY26 earnings. MOSL cited a cautious outlook for the domestic commercial vehicle (CV) industry amid geopolitical uncertainties and possible near-term margin pressure. The brokerage highlighted that EBITDA margin expanded 130 basis points year-on-year to 13.9%, supported by operating leverage benefits.

MOSL has lowered its growth forecast for Tata Motors CV volumes to 6% CAGR over FY26-28E from 8% CAGR earlier. The brokerage now expects Tata Motors to report revenue, EBITDA, and profit after tax CAGR of 8%, 8%, and 10%, respectively, over FY26-28E. MOSL added that the stock appears fairly valued at 20.8x FY27 estimated EPS and 17.9x FY28 estimated EPS. The target price of ₹414 per share is based on valuing the core business at 12x FY28 estimated EV/EBITDA, in line with peers, while also assigning ₹12 per share for the company's stake in Tata Capital.