Tata Motors shares hit record high, rebound 981% from Covid low; what’s next?

Shares of Tata Motors Ltd hit a record high in early trade amid negative sentiment in the broader market today. With today’s rally, Tata Motors stock has recovered 981% from its Covid low in 2020. Tata Motors stock fell to a low of Rs 63.60 on March 24, 2020 after the Modi government imposed Coronavirus lockdown to prevent the spread of Covid-19 cases across the country.   In the current session, Tata Motors shares gained 1.09% to a high of Rs 687.55 on BSE.

Tata Motors stock opened higher at Rs 684 on Friday. Market cap of the firm rose to Rs 2.26 lakh crore. Total 3.11 lakh shares changed hands amounting to a turnover of Rs 21.29 crore on BSE. Tata Motors stock hit a 52-week low of Rs 375.50 on December 26, 2022.   

Tata Motors stock has a one-year beta of 0.1, indicating very low volatility during the period.  In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 69.2, signaling it's trading neither in the overbought nor in the oversold zone. Tata Motors shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages  

The auto stock has surged 62% in a year and gained 73.70% in 2023. 

YES Securities has assigned a target price of Rs 773 to the Tata Group stock.  "We like Tata Motors given its improving India franchise, early leadership in EVs in India, and JLR’s improved profitability. Standalone business is in mid-upcycle led by cyclical recovery both in PV and CV whereas favorable product cycle to help drive JLR outperformance. We raised FY24/25 consol EPS by 3-4% to factor in for better margins at JLR. We estimate revenue/EBITDA CAGR of 8%/17% in FY23-26E and maintain BUY with SoTP based target price of Rs 773 (v/s Rs 768 earlier)," said the brokerage. 

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, “The stock has been in consolidation for quite some time and recently indicating a reversal from the important 50EMA level of Rs 628 zone has given a decent pullback to improve the bias and is on the verge of a breakout above Rs 678 levels which would further trigger for fresh upward move with next initial target visible till Rs 705 levels and further strength can carry the price to next target of Rs 740. The near term support would be lying near Rs 634 levels.”   

AR Ramachandran from Tips2trades said, "Tata Motors is bullish on daily charts with next resistance at Rs 690. A daily close above this resistance could lead to target of 720 in the near term. Support will be at Rs 671." 

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Tata Motors is in a well-established bull run. As we advance, Rs 700 would act as resistance, and support is expected near Rs 666. The counter may see some correction if it fails to cross the Rs 700 resistance zone." 

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