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Shares of Tata Motors zoom 30% in four sessions, here's why

Shares of Tata Motors zoom 30% in four sessions, here's why

Tata Motors shares climbed 4.81 per cent to a new high of Rs 435.65 today against the previous close of Rs 415.65

 Rise in global wholesales in Q2 and record order book for Jaguar land Rover have pushed the shares higher in four sessions. Rise in global wholesales in Q2 and record order book for Jaguar land Rover have pushed the shares higher in four sessions.

Share of Tata Motors hit a fresh 52-week high today after the auto major reported a 24 per cent rise in global wholesales during September quarter. The Tata Group stock has zoomed 30 per cent in four sessions. On October 6, 2021, the company's shares closed at Rs 336 on the BSE.

Rise in global wholesales in Q2 and record order book for Jaguar land Rover have pushed the shares higher in four sessions.

The shares climbed 4.81 per cent to a new high of Rs 435.65 today against the previous close of Rs 415.65.

Earlier, the stock opened 2.18 per cent higher at Rs 424.70 on the BSE.

Also read: Multibagger alert! This Tata Group stock doubled shareholder's money in 2021

The company's shares are trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 209 per cent in one year and risen 129.1 per cent since the beginning of this year. The stock has zoomed 21 per cent in a week.

The Tata Motors Group's global wholesales in Q2FY22, including Jaguar Land Rover, climbed 24 per cent to 2,51,689 units.

Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range in Q2FY22 climbed 57 per cent  to 89,055 units, while passenger vehicles sales zoomed 11 per cent to 1,62,634 units on an year-on-year basis.

Also read: Tata Motors records 55% sales growth in Q2 of FY22

Global wholesales for Jaguar Land Rover stood at 78,251 vehicles (JLR number for Q2FY22 includes CJLR volumes of 14,219 units). Jaguar wholesales in Q2 were at 13,944 vehicles, while Land Rover wholesales for the quarter came at 64,307 vehicles.

On October 8, Tata Motors said that the underlying demand for Jaguar Land Rover products remains strong with order books at record levels.

Despite the impact of the semiconductor shortage on production and sales, the company continues to see strong demand for its products with global retail orders at record levels in excess of 1,25,000 vehicles, the firm said.

Subsequently, the auto company's shares zoomed 9.1 per cent to fresh 52-week high of Rs 417.3 on October 11. The stock has rallied nearly seven times from its lockdown low of Rs 63.60, hit on March 24, 2020.

On October 9 this year, ICICI Direct gave a buy call for the stock with a target price of Rs 450.

"Retaining our forward estimates, we now value Tata Motors at a revised target price of Rs 450 on SOTP basis (15x, 3.3x FY23E EV/EBITDA on India, JLR businesses, respectively). We revise upwards our target multiples for India business amid continued outperformance at Tata Motors India and is in line with its peers," the brokerage said.

Motilal Oswal has given a target price of Rs 460 for Tata Motors.

"All of the company's three businesses are on the path to recovery. While the Indian commercial vehicle business would see cyclical recovery, the passenger vehicle business is undergoing structural recovery," it said.

"JLR is also witnessing a cyclical recovery, supported by a favourable product mix, however, supply-side issues would defer the recovery process. While there would be no near-term catalysts from the JLR business, the India business (around 50 percent SOTP) would see continued recovery. Maintain buy, with a target price of Rs 460 (Sep'23E SOTP-based)," the brokerage said.