Today’s gains mark an uninterrupted seven-session rally in the stock where the gains have been to the tune of over 10%.
Following the announcements made by the company during its ‘Investor Day’ meeting on Wednesday, several top brokerages, including Jefferies, CLSA, Morgan Stanley, Nomura, Motilal Oswal and Nuvama, recommended a ‘Buy’ rating on India’s leading EV maker. Kotak Institutional Equities although has a ‘Reduce’ recommendation on the counter.
The carmaker also said that it plans to further expand its portfolio across EV and ICE in the passenger vehicle segment along with securing battery supply, with a group company setting up battery plants in India and Europe. In CVs, the company reiterated its focus on brand enhancement, digitisation and margins.
Here’s what brokerages recommend on the stock:
CLSA: Buy | Target: Rs 624
CLSA maintains a ‘Buy’ on Tata Motors shares. In a report, the brokerage firm highlighted management’s focus on achieving its goals with sustainability in mind. It said that all factors related to commercial vehicle demand remain positive. The company is expected to retain its leadership in the EV segment which will help it gain market share in the passenger vehicle segment, CLSA added.
Morgan Stanley: Overweight | Target: Rs 617
Morgan Stanley remains ‘Overweight’ on Tata Motors and has a price target of Rs 617. It said that the company’s EV battery manufacturing is likely to start in two years. This would in turn improve PV margins for the carmaker. Continued growth in CV volumes and tonnage along with strong FCF is expected to follow, Nomura said. Moreover, Tata Tech IPO is likely to support deleveraging.
Nomura: Buy | Target: Rs 610
Nomura sees a further scope of upside in PV and CV segments. The company will likely gain market share in PV led by new launches, it said. “Companies focus on getting breakeven in margins for EV business, augurs well. Successful execution can lead to significant upside to estimates,” it added.
Motilal Oswal: Buy | Target: Rs 650
Motilal Oswal Financial Services maintains a ‘Buy’ on Tata Motors shares for a price target of Rs 650. It sees a strong double-digit EBITDA margin for the CV business. The company is also expected to benefit from the implementation of the voluntary scrappage policy from April 2023, it said. The company is aspiring to be in the top-3 in all its product segments.
Nuvama: Buy | Target: Rs 645
Nuvama maintains ‘Buy’ with a revised target price of Rs 645 from Rs 620, earlier. “We increase FY24E/25E EPS by 2%/5%. While domestic PV/CV industries are likely to see single-digit growth in FY24, the uptrend across JLR and India CV/PV business shall drive revenue CAGR of 15% over FY23–25E. Besides, tight cost control should bolster EBITDA CAGR to 35% over FY23-FY25E,” it said.
Kotak Institutional Equities: Buy | Target: Rs: 530
Kotak maintains its FY2024-25E estimates but downgrades the stock to ‘Reduce’ after the recent rally. Commodity tailwinds and a superior product mix will support margin recovery, but elevated inventory levels in the PV segment may drive the discount higher. We downgrade the stock to ‘Reduce’ from an ‘Add’ with an unchanged FV of Rs 530, it said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)