Shares of Tata Motors, one of the widely tracked scrips in the auto sector, have been trading below the Rs 500 mark since February 17 this year. The correction in the stock can be attributed to the economic slowdown, global shortage of semiconductors, weak global markets and Russia-Ukraine war. Tata Motors stock, which closed at Rs 500 on February 17 is down 19.4 per cent till date. It hit a 52-week low of Rs 366.05 on May 12, 2022. However, the stock has recovered 9 per cent from its 52 week low but still trading below the Rs 400 mark.
At 3:05 pm, the Tata Motors stock was trading at Rs 399.05, up nearly 0.64 per cent against the previous close of Rs 396.50 on BSE. The share has been gaining for the last two sessions. Tata Motors stock is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Market cap of the firm stood at Rs 1.32 lakh crore.
The stock has lost 21.25 per cent this year and declined 17.27 per cent in 2022.
With the ongoing volatility in the market and clouds of recession hovering over the global economy, the outlook of Tata Motors stock looks uncertain. Reclaiming the Rs 500 mark, which the stock gave up this year might take too much time, considering the current market conditions.
Here's a look at what brokerages expect from the auto stock of the Tata Group.
The stock is seen rising up to 24 per cent in a year, according to financial services firm Motilal Oswal. The financial services firm gave a target of Rs 510 for the auto stock in a report dated October 9. The target implied an upside of 23.72 per cent to the closing price of Rs 412.2 on October 7. With easing of chip shortages, JLR expects sales to improve over the remaining financial year, said the report.
Demand for the new Range Rover, new Range Rover Sport and Defender are particularly strong with orders accounting for over 145k units of the 205k units, indicating a better outlook for the business of JLR .
"While there will be no near-term catalysts from the JLR business, the India business will see a continued recovery. The stock trades at 16.3x FY24E consolidated EPS and 2.8x P/B. We maintain our BUY rating, with a target price of Rs 510 (premised on Sep'24E SoTP)," said Motilal Oswal.
Japanese brokerage Nomura has given a buy call on Tata Motors with a target of Rs 520
Tiago EV received 10k 1st day bookings which is big positive for the stock. The brokerage expects Tiago EV to sell 3000 to 5,000 units per month and its overall Tata Motors EV sales to touch 60,000/96,000 in FY23/24F.
"Every 1 per cent market share gain in personal vehicles has potential to add Rs 5000 crore to the company's market cap," added Nomura.
On October 10, JPMorgan downgraded the scrip to neutral from overweight after Jaguar Land Rover (JLR) reported a 4.9 per cent decline in retail sales in Q2. Sales declined to 8,121 units in Q2 against 92,710 units in the corresponding quarter of previous fiscal.
The brokerage said downgrade occurred due to a delay in deleveraging timelines at JLR. A delay in free cash flow generation raises risks to JLR's debt reduction targets. It also trimmed FY23-25 consolidated earnings per share (EPS) estimates of the Indian auto major by 12-25 per cent. The brokerage cut its target price to Rs 455 from the previous target of Rs 525.
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