One of India's largest auto companies has made a strong comeback on the bourses within one month of hitting its yearly low. After falling to a 52-week low of 129 on February 8, 2019 on NSE, the Tata Motors share price has risen 53.75% to Rs 198.35 level (intra day) till date.
Tata Motors share outperformed its peers on bourses during the same period. While Maruti Suzuki rose 0.07%, Mahindra & Mahindra lost 3.87% since February 8.
Experts attribute the rise in Tata Motors share price to the launch of new models and continuous efforts to bring UK arm Jaguar Land Rover on recovery path.
In positive developments for Tata Motors today, investment advisory firm Macquarie assigned outperform rating to the stock. The firm's UK arm Jaguar Land Rover also posted its best February sales in the US, which pushed its stock higher by over 10% on the Nifty today. Tata Motors share price rose 9.94% to 198 intra day compared to the previous close of 180.10 on BSE.
Tata Motors share opened at 183.95 level and hit an intra day low of 181.50 on BSE. On Nifty, the stock rose 10.01% to 198.35 level in trade today.
Tata Motors share has gained 9.59% during the last three days. Tata Motors share turnover rose to Rs 89.48 crore with 46.56 lakh shares changing hands on BSE.
Plagued by a continuous decline in quarterly performance and downgrade by credit ratings agencies, Tata Motors share price lost 44% during the last one year. However, it has risen 12.25% since the beginning of this year. Business Today spoke to analysts to find out whether the recent rise in the Tata Motors share price presents a good buy or hold opportunity. Here's what they said:
Mustafa Nadeem, CEO at Epic Research said, "There have been certain rumours on the street related to Tata Motors and a possible stake sale in its JLR Arm. Though, it has been denied clearly by the management later putting an end to possible speculation but the stock has clearly surged post that despite a weak number with some possible improvements in its various segment. Despite the drop in domestic sales of 3% to 57221 units, certain areas have seen improvement such as I&LCV truck segment, SCV cargo and pick up segment was up. The negative side weighed more like the drop in Commercial passenger carrier and exports in February were down 18% and 39%, respectively.
Now on the flip side, Tata Motors has seen some good recovery and on the technical front, we believe it is due to large short covering rally we have seen initially later poised by good value buying.
We believe this is an initial run up as the trend has been in effect for some time and there may be some profit booking in short term. The stock has a very strong resistance in the zone of 208-220.
With recent price action, we believe anyone willing to invest with short term view can look to accumulate at lower levels of 175-180 with upside of 218."
Vinay Rajani, technical analyst at HDFC Securities said, "From the bottom of 129 registered on February 8 2019, the stock has surged 53% in the span of just 17 sessions. In November 2018 and January 2019, Tata Motors formed a two weekly tops around 200 odd levels. Today's high is very near to that resistance. Risk reward ratio is not favourable for buying at current market price. However, the recent recovery along with the rise in volumes, indicates that stock might have bottomed out for medium to long term. So, any dip from this level should be considered as a buying opportunity.
To conclude, range of 175 -180 is good support, which should be utilised to accumulate long positions in Tata Motors. Above 200, stock may extend this rally towards 222.
Edited by Aseem Thapliyal