Jefferies believes Tata group stocks should remain driven by business fundamentals despite N Chandrasekaran's planned exit as Tata Sons chairman in February 2027. According to analysts led by Mahesh Nandurkar, the looming leadership change at Tata Sons is no reason to abandon the group, with company-level performance expected to remain the more decisive driver for investors. As reported by The Financial Express, the brokerage expects business fundamentals to prevail looking through potential near-term market concerns related to the leadership transition. "Looking through the potential near-term market concerns related to leadership change, we believe business fundamentals will prevail," analysts wrote in their strategy note. The brokerage takes a stock-specific approach rather than treating the leadership change as a reason to turn cautious across the group, with choices driven by individual business factors including hotel demand, consumer growth, steel prices, air-conditioner volumes, valuation, and company-specific execution risks.
Jefferies identified Tata Consumer Products, Tata Steel, Indian Hotels and Voltas as its top picks, assigning Underperform ratings to TCS, Tata Motors Passenger Vehicles and Tata Power. The brokerage's preferred list includes four 'Buy' calls with up to 37% upside, while two stocks carry 'Hold' ratings and three are rated 'Underperform'. According to Business Standard, Tata Consumer Products has the highest upside at 37% with a target price of ₹1,450, followed by Tata Steel at 29% upside with a target of ₹240, Indian Hotels at 21% upside with a target of ₹875, and Voltas at 19% upside with a target of ₹1,530. The brokerage expects Tata Consumer Products' earnings before interest, taxes, depreciation and amortisation to grow at a 14% compound annual growth rate between financial year 2026 and financial year 2029, with margin expansion supported by the company's growth portfolio and international operations.
The most significant warning comes for TCS, where Jefferies maintained its Underperform rating and set a ₹1,800 price target, implying 23% downside as artificial intelligence threatens to compress revenue in application-managed services and business-process outsourcing. The brokerage expects constant-currency revenue and earnings per share to grow at compound annual growth rates of 4% and 5% respectively between financial year 2026 and financial year 2029. 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%. Tata Motors Passenger Vehicles is also rated Underperform with a ₹300 target and 12% potential downside, citing 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.
Titan and Trent occupy the middle ground with Jefferies expecting Titan to deliver 16% revenue growth and 21% EBITDA and profit growth on a compounded basis through fiscal 2029, though its rich valuation limits potential upside. Titan has a 'Hold' rating with a target price of ₹5,000, implying 2% downside, as the brokerage continues to see strong growth visibility, supported by jewellery market-share gains, premiumisation and expansion of adjacent businesses, but believes valuation limits the potential return. Titan trades at 75 times one-year forward price-to-earnings against a 10-year average of 60 times. Trent's growth has moderated amid a high base, softer demand and intensifying competition, so Jefferies remains on the sidelines until there is a visible acceleration. Trent has a 'Hold' rating with a target price of ₹3,435, implying 13% upside, with standalone revenue expected to grow at a 22% compound annual growth rate and earnings before interest, taxes, depreciation and amortisation at a 24% compound annual growth rate between financial year 2026 and financial year 2029. Tata Power received its third Underperform rating with a ₹355 target, remaining concerned about project-execution delays and unresolved issues at the Mundra power plant despite management targets for a 1.6-fold increase in revenue and 1.9-fold expansion in Ebitda and profit by fiscal 2030.
Jefferies sees significant opportunities in India's power sector as electricity demand rebounds and renewable-energy investments pick up. The brokerage maintains its 7% FY27 estimated power-demand growth forecast and expects India's power demand to grow at a 6% compound annual growth rate through FY30. July 2026 power demand rose 11% year-on-year, while demand in the first four months of FY27 increased 9% year-on-year. Against this backdrop, Jefferies has identified Torrent Power as the highest-upside stock in its utilities coverage, with 28% potential upside, followed by JSW Energy and Adani Power at 27% each. The brokerage's top picks include JSW Energy, Adani Energy Solutions and NTPC with target prices of ₹720, ₹2,060 and ₹425 respectively, implying up to 28% upside. Average merchant power prices rose 19% year-on-year to ₹5.0 per unit in July 2026, supporting the positive sector outlook. Jefferies notes that renewable-energy awards are picking up with 4.2 gigawatts awarded in FY27 through July, compared with 3.4 gigawatts a year earlier, while the planned ₹54,000 crore Intra-State Green Energy Corridor Phase III aims to support evacuation of 135 gigawatts of renewable capacity.
