May23 , 2022

Tata Motors’ Shares Rally Over 8%; Brokerages See Upto 50% Upside



By Malvika Gurung — Shares of the domestic automaker Tata Motors (NS:) zoomed 8.23% to Rs 402.95 apiece at 9:37 am on Friday, a day after the company released its earnings report for the March quarter.

The auto major posted an 86.4% YoY decline in its consolidated net loss to Rs 1,032 crore in the March quarter, while the figure narrowed 31.9% sequentially.

The company’s consolidated revenue fell 11.5% YoY to Rs 78,439 crore in the period, however, its demand remains strong despite inflationary and geopolitical pressures, stated the management.

Most brokerages remain bullish on the auto stock post the earnings results.

JP Morgan (NYSE:) and Morgan Stanley (NYSE:) have maintained their overweight rating on TaMo, with targets set at Rs 525/share and Rs 560/share, respectively.

JP Morgan expects the auto major to continue with its deleveraging journey while looking forward to a strong FCF recovery and guidance for FY23. It also pegs the net automotive debt to fall to Rs 11,800 crore by the next fiscal.

Even though the JLR segment is expected to have a weak Q1 in FY23, the guidance for the entire fiscal remains positive, as TaMo now has a better hold on JLR as well as PVs and CVs segments, stated Morgan Stanley.

Brokerage Prabhudas Lilladher is positive about the automaker, expecting the PV segment to gain further market share, led by revamped portfolio, customer preference for SUVs and rising EV penetration, revival in JLR and strong order book, among other factors.

It has a Buy rating on the stock, with a target price of Rs 600/share, an upside of 50.11% compared to the current value.

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