Why Analysts See All-Time High On Rekha Jhunjhunwala Tata Group Stock?

Tata Motors is a bluechip automobile company that recorded a market cap of Rs 1,87,228.68 Cr during Monday's closing session. In January 2015, Tata Motors shares reached an all-time high of Rs 612.40, however following the company's Q4 results, top Indian brokerage firms ICICI Direct and Motilal Oswal expect the stock to reach a new high. The stock's target prices, which represent a new high for Tata Motors, have been determined by the research experts of ICICI Direct Research at Rs. 700 and by Motilal Oswal at Rs. 650.

Tata Motors Q4 Results

Tata Motors recorded highest ever revenue of Rs 105.9 KCr during Q4FY23 up by 35.1% from Rs 78.4 KCr during Q4FY22 whereas in full year FY23 its revenue stood at Rs 346.0 KCr up by 24.2% YoY from 278.5 KCr in FY22. Tata Motors recorded EBIT of Rs 7,154 Cr during the quarter ended March 2023 compared to Rs 2,478 Cr during the quarter ended March 2022. The company's PBT (bei) reached Rs 5.0 KCr up by 4.6% from Rs 0.4 Cr in the same quarter of FY22. During Q4FY23, it recorded the highest ever EBITDA of Rs 14.1 K crs whereas in FY23 Tata Motor posted highest ever EBITDA of Rs 37.0 K crs since FY 2015.

Tata Motors Limited sold 74,973 units in the domestic and foreign markets in May 2023 compared to 76,210 units in May 2022. The company recorded domestic sales of 73,448 units compared to 74,755 units in May 2022, representing a fall of 2% YoY. In May 2023, domestic sales of MH&ICV, which include trucks and buses, totaled 11,442 units, down from 12,056 units in May 2022. Trucks and buses were included in the total sales for MH&ICV Domestic & International Business in May 2023, which were 11,958 units as opposed to 12,810 units in May 2022. The company recorded total passenger vehicles (PV) sales of 45,984 units up by 6% YoY from 43,392 units in May 2022 whereas its total commercial vehicles (CV) sales reached 28,989 units down by -12% from 32,818 units.

Tata Motors Share Price Target

The research analysts of ICICI Direct Research have recommended to buy Tata Motors for a target price of Rs 700. However they find two key risks for the stock which are slower than expected ramp up in foreign operations, and slower than anticipated margin recovery.

Whereas, the analysts of Motilal Oswal have recommended to buy the stock for a target price of Rs 650. Commenting on the valuation of the stock they said Tata Motors "should witness a healthy recovery as supply-side issues ease (for JLR) and commodity headwinds stabilize (for the India business). It will benefit from: a) the CV upcycle and stable growth in PVs, b) company-specific volume/margin drivers, and c) a sharp improvement in FCF, as well as a reduction in net debt in both JLR and the India business."

Tata Motors Share Price

The shares of Tata Motors closed today on the NSE at Rs 563.80 apiece up by 0.27% from the previous close of Rs 562.30. The stock touched a 52-week-high of Rs 576.55 on (08-June-2023) and a 52-week-low of Rs 375.20 on (26-Dec-2022). During Q4FY23, Tata Motors recorded promoters shareholding of 46.39%, FIIs stake of 15.34%, DIIs stake of 17.69%, Govt stake of 0.14% and public stake of 20.41%. According to the shareholding pattern of Tata Motors for January to March 2023 quarter available on BSE, Rekha Jhunjhunwala wife of late ace investor Rakesh Jhunjhunwala held fully paid up equity shares of 5,22,56,000 or resulting to a stake of 1.57% in the company.

Disclaimer

The stock has been picked up by market analysts and is not a recommendation of either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.