Tata Motors shares: Up 41% this year, can the Tata Group stock rise further?
Tata Motors stock zoomed 2.41% to Rs 548.65 against the close of Rs 535.75 in the previous session. In the current session, Tata Motors stock opened at Rs 538.05 on BSE.
- Jun 5, 2023,
- Updated Jun 6, 2023 2:04 PM IST
Shares of Tata Motors hit a fresh 52-week high today as the auto stock rose for fourth consecutive session amid a rally in the broader market. Tata Motors stock zoomed 2.41% to Rs 548.65 (a fresh 52-week high) against the close of Rs 535.75 in the previous session. In the current session, Tata Motors stock opened at Rs 538.05 on BSE. Market cap of the firm rose to Rs 1.82 lakh crore. Total 5.92 lakh shares changed hands amounting to a turnover of Rs 32.19 crore on BSE. Tata Motors stock has gained 26.81% in a year and risen 41.12 per cent in 2023. Tata Motors stock hit a 52-week low of Rs 375.50 on December 26, 2022.
In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 67.9, signaling it's trading neither in the overbought nor in the oversold zone. Tata Motors stock has a one-year beta of 1.2, indicating high volatility during the period. Tata Motors shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The stock was among the top Sensex and Nifty gainers today after the Tata Group, through its subsidiary, Agratas Energy Storage Solution, inked a Memorandum of Understanding (MoU) with the Gujarat government for its capital expenditure plans in the state. The move will significantly support the development of the electric-vehicle (EV) industry in India.
According to an official announcement by the Gujarat government, the project is set to start with an initial investment of Rs 13,000 crore (equivalent to $1.8 billion) during its first phase. This endeavour aims to establish a factory with a substantial capacity of 20 gigawatts (GW), furthering the government's push towards achieving 100 percent EV adoption and reduction in carbon emissions by 50 per cent by 2030.
On May 26, Moody's Investors Service said it has upgraded its rating outlook on Tata Motors to positive from stable. Moody's has also affirmed the company's B1 corporate family rating (CFR) and its B1 senior unsecured ratings.
“The rating affirmation and outlook change to positive reflect our expectation that the substantial improvement in Tata Motor's credit profile over the past few quarters will sustain over the next 12-18 months," said Moody's Senior Vice President Kaustubh Chaubal said.
On May 12, 2023, the company reported a consolidated net profit of Rs 5,408 crore in Q4 compared with a loss of Rs 1,033 crore in the year-ago period. On a sequential basis, Tata Motors reported a second consecutive quarterly profit, helped by price hikes and strong demand for cars in its luxury Jaguar Land Rover (JLR) stable as well as for commercial trucks.
Abhijeet from Tips2trades said, “Even though Tata Motors stock price has been bullish but it is also overbought on the daily charts with next resistance at Rs 567. Investors should book profits at current levels and wait for a dip near Daily support of Rs 480 to buy for better returns. Immediate support will be at Rs 538."
JM Financial has assigned a target price of Rs 625 for the Tata Motors stock.
"Strong FCF generation is expected to support higher investments towards electrification at JLR. Tata Motors’ EV portfolio is leading the domestic EV space. Improving margins for both domestic CV and PV segments augurs well for the overall profitability of the company. The company targets to turn net debt free by FY25. Maintain BUY with Mar’24 SOTP of Rs 625 (standalone / JLR valued at 10x /2.5x EV/EBIDTA). Slower ramp-up in production, slowdown in key global markets and inherent risk in evolving EV technologies are the key risks," said the brokerage.
V.L.A. Ambala from Stock Market Today said, "We had recommended to buy it near Rs 420 and Rs 530 was our first target (achieved). This stock is in a bullish momentum and trying to hit its all-time high. So, those who are already in it they can hold it for more gains. Upcoming targets are 570/600/610/630/650/670/700/750 (3 months to 1 year). For any fresh buying, one should wait a little as price has already touched is 2nd target and now a pullback is expected. Now Rs 450 level is a strong support range (so stop loss should be below this ideally Rs 435) and pullback is expected in the range of Rs 500-530. RSI also showing the same over bought zone and however volumes are still increasing in it, so buy on dip strategy will be best practice in it coming days."
Motilal Oswal is bullish on the stock with a target price of Rs 590.
"We upgrade our consol. EPS by 13%/6% for FY24E/25E to factor in: a) JLR’s volume ramp up as well as moderation in certain costs, and b) margin improvements in India businesses. BUY a TP of Rs 590, " said the brokerage.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock after a short consolidation has again regained strength and has indicated a breakout on the daily chart crossing the previous zone of Rs 537 levels to anticipate for further fresh upward move in the coming days. The near-term stop loss one can keep is at around 535 levels and can expect for next targets of Rs 570-590 levels."
On the other hand, foreign brokerage UBS has resumed its coverage on the Tata Motors stock with an anti-consensus view. The brokerage has suggested 'Sell' on the stock with a target of Rs 320, saying the JLR-owner's negatives are overlooked and that positives are largely priced in. UBS said the market is underestimating the rapid electrification of premium cars and JLR that accounted for two-third of Tata Motors' sales and Ebitda in FY23 could be vulnerable going ahead.
Also read: June stock picks: SBI, Ashok Leyland, TCS, ITC among shares that analysts picked this month
Shares of Tata Motors hit a fresh 52-week high today as the auto stock rose for fourth consecutive session amid a rally in the broader market. Tata Motors stock zoomed 2.41% to Rs 548.65 (a fresh 52-week high) against the close of Rs 535.75 in the previous session. In the current session, Tata Motors stock opened at Rs 538.05 on BSE. Market cap of the firm rose to Rs 1.82 lakh crore. Total 5.92 lakh shares changed hands amounting to a turnover of Rs 32.19 crore on BSE. Tata Motors stock has gained 26.81% in a year and risen 41.12 per cent in 2023. Tata Motors stock hit a 52-week low of Rs 375.50 on December 26, 2022.
In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 67.9, signaling it's trading neither in the overbought nor in the oversold zone. Tata Motors stock has a one-year beta of 1.2, indicating high volatility during the period. Tata Motors shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The stock was among the top Sensex and Nifty gainers today after the Tata Group, through its subsidiary, Agratas Energy Storage Solution, inked a Memorandum of Understanding (MoU) with the Gujarat government for its capital expenditure plans in the state. The move will significantly support the development of the electric-vehicle (EV) industry in India.
According to an official announcement by the Gujarat government, the project is set to start with an initial investment of Rs 13,000 crore (equivalent to $1.8 billion) during its first phase. This endeavour aims to establish a factory with a substantial capacity of 20 gigawatts (GW), furthering the government's push towards achieving 100 percent EV adoption and reduction in carbon emissions by 50 per cent by 2030.
On May 26, Moody's Investors Service said it has upgraded its rating outlook on Tata Motors to positive from stable. Moody's has also affirmed the company's B1 corporate family rating (CFR) and its B1 senior unsecured ratings.
“The rating affirmation and outlook change to positive reflect our expectation that the substantial improvement in Tata Motor's credit profile over the past few quarters will sustain over the next 12-18 months," said Moody's Senior Vice President Kaustubh Chaubal said.
On May 12, 2023, the company reported a consolidated net profit of Rs 5,408 crore in Q4 compared with a loss of Rs 1,033 crore in the year-ago period. On a sequential basis, Tata Motors reported a second consecutive quarterly profit, helped by price hikes and strong demand for cars in its luxury Jaguar Land Rover (JLR) stable as well as for commercial trucks.
Abhijeet from Tips2trades said, “Even though Tata Motors stock price has been bullish but it is also overbought on the daily charts with next resistance at Rs 567. Investors should book profits at current levels and wait for a dip near Daily support of Rs 480 to buy for better returns. Immediate support will be at Rs 538."
JM Financial has assigned a target price of Rs 625 for the Tata Motors stock.
"Strong FCF generation is expected to support higher investments towards electrification at JLR. Tata Motors’ EV portfolio is leading the domestic EV space. Improving margins for both domestic CV and PV segments augurs well for the overall profitability of the company. The company targets to turn net debt free by FY25. Maintain BUY with Mar’24 SOTP of Rs 625 (standalone / JLR valued at 10x /2.5x EV/EBIDTA). Slower ramp-up in production, slowdown in key global markets and inherent risk in evolving EV technologies are the key risks," said the brokerage.
V.L.A. Ambala from Stock Market Today said, "We had recommended to buy it near Rs 420 and Rs 530 was our first target (achieved). This stock is in a bullish momentum and trying to hit its all-time high. So, those who are already in it they can hold it for more gains. Upcoming targets are 570/600/610/630/650/670/700/750 (3 months to 1 year). For any fresh buying, one should wait a little as price has already touched is 2nd target and now a pullback is expected. Now Rs 450 level is a strong support range (so stop loss should be below this ideally Rs 435) and pullback is expected in the range of Rs 500-530. RSI also showing the same over bought zone and however volumes are still increasing in it, so buy on dip strategy will be best practice in it coming days."
Motilal Oswal is bullish on the stock with a target price of Rs 590.
"We upgrade our consol. EPS by 13%/6% for FY24E/25E to factor in: a) JLR’s volume ramp up as well as moderation in certain costs, and b) margin improvements in India businesses. BUY a TP of Rs 590, " said the brokerage.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock after a short consolidation has again regained strength and has indicated a breakout on the daily chart crossing the previous zone of Rs 537 levels to anticipate for further fresh upward move in the coming days. The near-term stop loss one can keep is at around 535 levels and can expect for next targets of Rs 570-590 levels."
On the other hand, foreign brokerage UBS has resumed its coverage on the Tata Motors stock with an anti-consensus view. The brokerage has suggested 'Sell' on the stock with a target of Rs 320, saying the JLR-owner's negatives are overlooked and that positives are largely priced in. UBS said the market is underestimating the rapid electrification of premium cars and JLR that accounted for two-third of Tata Motors' sales and Ebitda in FY23 could be vulnerable going ahead.
Also read: June stock picks: SBI, Ashok Leyland, TCS, ITC among shares that analysts picked this month