Stock to Buy: This Multibagger Tata Group Stock Gets Buy Call For 59% Potential Upside

KR Choksey in its "Auto Sales Update September 2022" report has suggested "Buy" the stock of Tata Motors Ltd. for a target price of Rs 630 apiece. Tata Motors is a large cap Tata Group Automobile sector company having a market capitalisation of Rs 1,32,056 crore. Investors can anticipate potential gains of 59% if the stock purchase at the current market price considering the target price.

Stock Outlook & Returns

The current market price (CMP) of the stock is Rs 397.65 apiece on NSE. The stock hit the 52-week low level on 01 October 2021 at Rs 325.70 apiece. The 52 week high of the stock is Rs 536.70 apiece, recorded on 17 November 2021. 

The stock in the past 1 and 3 months has given 13.88% and 3.65% negative returns, respectively. Over the past 1 year, the stock has given 19.31% positive returns. It has given 224.88% multibagger returns in 3 years. It gave a 4.41% negative return in the past 5 years. 

Auto Sales Update September 2022

Tata Motors' total monthly sales for September 2022 were 82,754 units, which grew by 39.9% YoY. Total domestic sales grew by 44.0% YoY to 80,633 units. Domestic PV sales were at 47,654 units, which was a growth of 85.2% YoY. Tata Motors achieved the highest ever monthly as well as quarterly sales of PVs in the domestic market in September 2022 and Q2FY23, respectively. Within domestic PV, EV growth was at 239.1% YoY, while the growth of vehicles with ICE engines was 78.5% YoY.

Domestic CV sales grew by 9.0% YoY to 32,979 units in September 2022. Exports of CVs declined by 36.3% to 1,911 units, impacted by the economic situation in Sri Lanka and Nepal.

Cumulatively for H1FY23, Tata Motors' total sales grew by 66.0% YoY over H1FY22. In H1FY23, domestic PV sales grew by 83.7% YoY, while domestic CV sales grew by 55.8%.

Brokerage's View

Tata Motors continues to benefit from the recovery in the domestic CV industry due to improving economic activity, improving fleet utilization, and pick-up in infrastructure development. CV exports are under pressure due to economic issues in Sri Lanka and Nepal. Tata Motors' PV sales are on a strong trajectory due to new launches by the company and a higher share of SUVs in the portfolio. Tata Motors' EV play is gaining traction and the company is reporting higher and higher EV sales within the PV segment. With improving supply and the festive season, sales traction should continue.

Buy Tata Motors Stock for Target Price Rs 630 apiece

TTMT is seeing good performance traction in the domestic PV and CV businesses. JLR performance is expected to improve as production and supply-related issues clear out. "We apply a multiple of 18.5x on FY24E EPS of INR 34.0 and arrive at a Target price of INR 630. We maintain our "BUY" rating on the shares of Tata Motors," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of KR Choksey. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.