Tata Motors shares scale fresh 52-week high, stock up 60% in 2023 so far; more steam left?

Shares of Tata Motors have gained nearly 60 per cent on a year-to-date (YTD) basis. The stock rose 2.61 per cent to hit a new 52-week high of Rs 634.60. It was last seen trading 0.65 per cent higher at Rs 622.50. Domestic brokerages have assigned a 'Buy' call on the counter with a target price of up to Rs 720. Prabhudas Lilladher sees the stock at Rs 675. Nuvama Institutional Equities has suggested a target price of Rs 720.

The carmaker's UK arm Jaguar Land Rover (JLR) recorded a 30 per cent rise in wholesale volumes for the first quarter at 93,253 units (excluding the Chery Jaguar Land Rover China JV) compared to the corresponding quarter a year ago. The group's global wholesales came at 322,159 units in June quarter, up 5 per cent year-on-year (YoY).

On technical setup, the counter's 14-day relative strength index (RSI) came at 77.51. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 75.29. It has a price-to-book (P/B) value of 9.14.

The scrip has a one-year beta of 1.17, indicating high volatility.

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "The stock has seen a strong move in the recent period and is hovering at its 52-week highs on the technical charts. The stock has entered into an overbought region on technical parameters and post such a strong stellar run. One should not rule out the possibility of profit booking. However, the undertone remains buoyant till it sustains above the immediate support zone of Rs 580-odd levels and one needs to adopt an approach to buy the declines in the counter."

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Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock has gained much strength and has witnessed a decent rally in the past three months by scaling the peak level of almost Rs 635 zone and finding resistance. It can slip slightly with a near-term support at Rs 600. The trend is maintained strong and only a decisive breach below Rs 580 zone would negate the positive bias. We have further upside target of Rs 650-660 open once a decisive breach above Rs 635 is confirmed."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Tata Motors is in a well-established uptrend as it is trading above all major exponential moving averages. Going forward, Rs 600 would act as solid support and Rs 650 would act as a major hurdle."

Ravi Singh, market expert, said, "The stock attracted buying activities after strong Q4 results where sales grew by 35 per cent YoY and profit rose to Rs 5,496 crore from net loss of Rs 992 crore in 2022. On technical setup, stock is trading above 50- and 200-DMA, which indicates strong bullishness. It can hit the target of Rs 650 in near term."

AR Ramachandran from Tips2trades said, "Tata Motors stock price has been bullish but it is also overbought on the daily charts with next resistance at Rs 656. Investors should book profits at current levels and wait for a dip near daily support of Rs 545 to buy for better returns. Immediate support will be at Rs 592."

Deven Mehata, Equity Research Analyst at Choice Broking said, "The stock has moved higher with strong volumes indicating strength. Any dip in the stock can be a buying opportunity. With a medium-term outlook, one can buy Tata Motors with a stop loss of Rs 590 for a target price of Rs 650."

Meanwhile, Indian equity benchmarks traded higher in today's early deals, led by gains in energy, state-owned banks and metal stocks.

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