Which Tata stocks look attractive now? Jefferies picks 4 and flags TCS and 2 others
N. Chandrasekaran, the chairman of Tata Sons, has announced that he will not seek another term after his tenure ends in February 2027, potentially raising near-term concerns over the group’s leadership. Jefferies expects company-level performance to remain the more decisive driver for investors.
“Looking through the potential near-term market concerns related to leadership change, we believe business fundamentals will prevail,” analysts led by Mahesh Nandurkar wrote in a strategy note.
The brokerage identified Tata Consumer Products, Tata Steel, Indian Hotels and Voltas as its top picks. It assigned Underperform ratings to TCS, Tata Motors Passenger Vehicles and Tata Power, while keeping Hold recommendations on Titan and Trent.
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Tata Consumer offers the largest stated upside among the four preferred stocks. Jefferies set a price target of ₹1,450, implying more than 30% potential upside, citing the company’s relatively limited dependence on crude oil-linked inputs and the rapid expansion of its newer businesses.
The growth portfolio, which includes Tata Sampann, ready-to-drink products, Tata Soulfull, Capital Foods and Organic India, accounted for more than 35% of revenue in fiscal 2026, compared with a mid-single-digit contribution in fiscal 2020. Its quarterly revenue also exceeded the beverages and salt businesses individually for the first time, according to the report.Management has guided for growth of more than 30% in that portfolio. Jefferies forecasts a 14% compound annual growth rate in Ebitda over fiscal 2026 to fiscal 2029, along with about 180 basis points of margin expansion and a 20% CAGR in profit before exceptional items.
Tata Steel is the brokerage’s next-largest upside call, with a ₹240 target implying a potential gain of 29%. The company is positioned to benefit from a possible recovery in Indian steel prices and an expansion in Asian conversion spreads, while the increasing contribution from its higher-margin India operations is improving the quality of its asset mix.
India’s share of Tata Steel’s total volumes rose to 70% in fiscal 2026 from 33% in fiscal 2015 and is projected to reach 73% by fiscal 2029. Still, the brokerage flagged a slowdown in volume growth after fiscal 2027 as the next five-million-ton-a-year plant is scheduled to start only in fiscal 2031. At 6.7 times estimated fiscal 2027 Ebitda, the stock trades close to its 10-year average multiple of 6.4 times.
Indian Hotels carries a ₹875 price target, representing 21% upside. Jefferies expects domestic travel demand, faster expansion through management contracts and the scaling of newer businesses to drive a 15% Ebitda CAGR through fiscal 2029.
The hotel operator is targeting more than 700 properties by fiscal 2030, compared with 382 operational hotels in June 2026. About 93% of its pipeline is under asset-light models, supporting expansion without a proportionate increase in capital requirements. Jefferies described Indian Hotels as its top pick among the hoteliers it covers.
Voltas completes the group of four preferred stocks, with a price target of ₹1,530. The company had an estimated 17% share of India’s room air-conditioner market in March and sold more than one million units in the first quarter of fiscal 2027, compared with about 2.3 million units for all of fiscal 2026.
Jefferies expects Voltas’ sales to grow at a 15% CAGR over fiscal 2027 to fiscal 2029 and profit after tax to increase at a 21% pace. The company has raised capacity at its Chennai plant to 1.5 million units from one million and plans to expand it to two million after two years.
The most significant warning in the report is TCS. Jefferies maintained its Underperform rating and set a price target of ₹1,800, implying 23% downside, as artificial intelligence threatens to compress revenue in application-managed services and business-process outsourcing.
A flat order book and a 3% year-on-year decline in headcount are also weakening growth visibility. The brokerage projects a revenue CAGR of just 3.9% over fiscal 2026 to fiscal 2029 and expects recurring profit to expand at about 5%.
TCS’s free-cash-flow-to-profit ratio fell to 84% in fiscal 2026 from 117% in fiscal 2021, while acquisitions and investments in data centers may constrain a recovery in cash conversion. The stock trades at about 15 times one-year forward earnings, a roughly 30% premium to Accenture compared with a 10-year average premium of 1%.
Given the weaker growth and cash-flow outlook, TCS’s “historical valuation premium is unlikely to be sustained,” Jefferies said.
Tata Motors Passenger Vehicles is also rated Underperform, with a ₹300 target and 12% potential downside. Jefferies cited rising competition, discounts, warranty expenses and aging models at Jaguar Land Rover. JLR’s capital work and product development in progress increased sixfold over fiscal 2023 to fiscal 2026 to about £8 billion, equivalent to 31% of total assets.
While Tata Motors’ Indian passenger-vehicle business is gaining share, Jefferies said it is unlikely to offset the drag from JLR.
The brokerage assigned its third Underperform rating to Tata Power and set a ₹355 target. It remains concerned about project-execution delays and unresolved issues at the Mundra power plant, even as management targets a 1.6-fold increase in revenue and a 1.9-fold expansion in Ebitda and profit by fiscal 2030.
Titan and Trent occupy the middle ground. Jefferies expects Titan to deliver 16% revenue growth and 21% Ebitda and profit growth on a compounded basis through fiscal 2029, but said its rich valuation limits potential upside. Trent’s growth has moderated amid a high base, softer demand and intensifying competition, leaving Jefferies on the sidelines until there is a visible acceleration.
