Shares of Tata Motors Limited is gearing for an upside and analysts see a rally. After the recent correction in the auto sector, analysts believe that the stocks may now witness a renewed momentum.
“In the current fall, the stock has declined sharply on the back of severe FIIs selling but found support near 380. Since then it has been crawling towards its Call base of 450 with significant OI addition in the future segment, indicating fresh long accumulation at lower levels,” ICICI Direct said.
On Tuesday, Tata Motors announced an impending price hike of its commercial vehicle range. It said that the hike will be effective from April 1st and it will be in the range of 2-2.5%
Meanwhile, Tata Motors is planning to invest ₹15,000 crores in the EV segment in the next five years and is planning to develop around 10 more new offerings in the segment
“You could say that Tata Motors 2.0 began FY18 onwards. After the Tiago was launched based on a new design language, it was followed by another very successful launch of the sub-4 metre SUV Nexon. With these products they started getting the retail customer back, fighting off the perception of poor service ratings, quality issues and a sentiment that Tata cars are primarily run as taxis,” said Vivek Kumar, vice president, JM Financial Institutional Securities.
The icing on the cake, however, is that Tata Motors entered the EV (electric vehicles) segment at the right time. Four out of five EVs sold in India in 2021 came from the Tata stable.
Targets
Shares of Tata Motors closed at ₹433.15, down 0.61%. Here are targets given by analysts:
ICICI Direct
The brokerage has given a buy call on Tata Motors Ltd. with a target price of ₹ 515 and a time period of 3 months. The brokerage recommended that a stop-loss should be kept at ₹ 389. This is an upside of 18.89%.
Edelweiss Research
On March 23, 2022, the brokerage lowered FY23E JLR volume by 13 per cent to 426k, considering supply constraints compensated by a strong order book and product cycle. However, it retains a buy call on the company’s shares with a target price of ₹ 616 per share due to a demand for CVs (commercial vehicles) and PVs (passenger vehicles). This means a potential upside of 42.21%
Ambit Capital
The brokerage reiterated its buy stance with a target price of ₹ 619 per share. Further, it upgraded the company’s FY23E consolidated EPS by 8 per cent led by 5 per cent rise in consolidated EBITDA. This could be a potential upside of 42.90%
5paisa
They forecast that domestic CV volumes will grow by 27% and PVs will grow by 26%. The brokerage forecasts Tata Motor’s business to grow by 26%. They expect an impact on JLRs production in the near term due to the geopolitical scenario in Europe. They have given a buy call with a target price of ₹ 580 per share and a time period of one year. This is an upside of 33.90%.
Financials
In the October to December quarter, Tata Motors reported a consolidated total income of ₹ 72931.86 crores, up 17.17% from ₹ 62245.73 crores in the July to September quarter and down 4.50% from ₹ 76365.79 crores during the same period last year. It reported a net profit after tax of ₹1338.17 crores in the October to December quarter.
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