Jefferies Research identifies Indian Hotels, Tata Steel, Tata Consumer Products, and Voltas as their preferred Tata stocks, prioritising fundamentals over leadership worries amid shifting valuations and growth prospects.
Jefferies Research has named Indian Hotels, Tata Consumer Products, Tata Steel and Voltas as its preferred Tata Group stocks, arguing that company fundamentals should matter more than near-term uncertainty around leadership at Tata Sons and the recent swing in group shares. The brokerage, in a strategy note cited by Business Standard, said it expects investors to look past the governance noise and focus on earnings, valuation and operating trends.
The firm is notably less positive on Tata Consultancy Services, Tata Motors Passenger Vehicles and Tata Power, which it rates Underperform. Jefferies points to weaker growth prospects at TCS, pressure at Jaguar Land Rover and execution concerns at Tata Power. It also has a Hold stance on Trent and Titan, saying both remain strong businesses but already reflect much of that strength in their share prices.
Valuations remain central to the call. According to Business Standard, Trent and Titan trade at about 69 to 75 times one-year forward earnings, making them the most expensive Tata names in Jefferies’ coverage. By contrast, Tata Motors Passenger Vehicles and Tata Steel screen much cheaper at roughly 9 to 12 times earnings, which Jefferies sees as more supportive of risk-reward.
Jefferies’ confidence in Indian Hotels is built on an asset-light expansion model and the scaling of newer businesses, with domestic travel demand expected to offset weaker outbound traffic. It sees the company delivering about 15% annual profit growth between FY26 and FY29. On Tata Steel, the brokerage expects a potential recovery in Indian steel prices and room for wider Asian spreads, while noting that the stock still trades close to its long-run valuation average. Tata Consumer is seen as comparatively resilient because of its lower reliance on crude-linked inputs, with international operations expected to aid margins. Voltas is another preferred name, with Jefferies citing rising room air-conditioner demand and capacity expansion as drivers of 15% to 21% growth in sales and profit over FY27 to FY29.
Its caution on Tata Motors Passenger Vehicles centres on JLR, where competition, discounts, warranty costs and heavy investment needs are weighing on the outlook. Financial Express reported separately that Jefferies sees a 21% downside in the stock and highlighted warranty costs at a 15-year high. Tata Power also remains under pressure in the brokerage’s view because of execution delays and issues linked to Mundra, despite the company’s diversified revenue mix across transmission, distribution, renewables and thermal and hydro power. Jefferies is meanwhile waiting for a clearer pickup at Trent, even after its rapid expansion, while Titan remains a Hold because of valuation despite strong demand trends and premiumisation.
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