The stocks of market mavens of Dalal Street are widely tracked by investors. Shares of Tata Motors Limited, a part of Big Bull Rakesh Jhunjhunwala's portfolio, have delivered a multi-bagger return to its shareholders in the last 12 months.
In the past one year, the share price of Tata Motors jumped from Rs 165.05 to Rs 470 mark ---- logging around 185 per cent return in this period. With a market capitalisation of more than Rs 1,55,000 crore, the shares stand higher than 100 day and 200 day moving averages but lower than 5 day, 20 day and 50 day moving averages.
Brokerage house Motilal Oswal said that Tata Motors should witness a gradual recovery from 2QFY22 lows as supply-side issues ease and commodity headwinds stabilize (for the India business). It would gain from the triple benefits of a macro recovery, company-specific volume/margin drivers, and sharp improvement in free cash flow (FCF) and leverage in both JLR as well as the India business.
"The recent fundraise by Tata Motors in the e-PV business and the resultant re-rating of the stock has made us curious about how investors should look at the valuations of the electric vehicle (EV) businesses of incumbent OEMs and whether a re-rating should depend on the external fundraise," it said in a recent research report.
"We believe the valuations of pure EV businesses are driven by the expected pace of electrification in the segment and the competitive landscape in the EV segment. In the Indian context, the speed of electrification would differ substantially across segments. Over the next five years, we expect electrification to be faster in 2Ws (15 per cent penetration), 3Ws (19 per cent ), buses (23 per cent ), and LCVs (18 per cent)," it added.
Motilal Oswal has a 'Buy' rating on the stock with a target price of Rs 565 per share.
According to Macquarie, market share gains and new launches are positive catalysts for the company. The brokerage firm has maintained an 'Outperform' rating on the stock with a target price of Rs 567 per share.
"We like TTMT’s continued market share gains in the domestic PV business, CV upcycle and delivery on FCF generation (aim is to be debt-free by FY24E) coupled with structured aggression in EVs," ICICI Securities said.
"We believe India EVCo value unlock raises its long term right to win in EVs in India and JLR’s too could also follow a similar template (of value unlock) as Jaguar turns pure-electric in FY24. We maintain 'Buy' with a revised SoTP-based target price of Rs 661," the brokerage added.
As per the shareholding pattern, Jhunjhunwala owns 1.11 per cent stake as of September 2021. Speaking exclusively with Business Today TV's Udayan Mukherjee, the Indian ace investor said that Tata Motors' foray into the electric vehicles segment will boost the stock going ahead.
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