Tata Motors share price jumped over 12 percent in the morning session on January 12 after CLSA maintained buy call on the stock.
The global research firm has retained buy rating with target at Rs 270 per share. JLR Q3 retail volume improved 13 percent QoQ and share of EVs rose to 12 percent. JLR retail sales was broadly in-line with monthly tracker, it said, according to a CNBC-TV18 report.
CLSA believes that JLR recovery should drive strong FCF generation and deleveraging for the company and continues to forecast a sequential volume recovery for JLR. Tata Motors remains our top pick in the sector, it added.
The research firm rorecasts JLR/India CV/India PV Volume to see CAGR of 0 percent/8 percent/28 percent respectively for FY20-23. It feels that JLR’s EBIT margin should improve from 0 percent in FY20 to 5.7 percent in FY23 adding that the auto net debt should decline from Rs 48,700 crore in FY20 to Rs 33,300 crore by FY23.
The stock was trading at Rs 248.90, up Rs 28.80, or 13.08 percent. It has touched a 52-week high of Rs 249. It has touched an intraday high of Rs 249 and an intraday low of Rs 224.05.
Tata Motors-owned Jaguar Land Rover (JLR) on January 11 released its 2020 sales figures, which reflect a considerable hit as a result of the COVID-19 pandemic but the company highlighted signs of recovery as sales in China remained strong.
For the calendar year 2020, Jaguar Land Rover retail sales were 425,974 vehicles, down 23.6 percent on 2019, reflecting the industry impact of COVID-19 particularly in the first half of the year when plants were shut down for more than two months.
However, the company said it has since seen sales increase quarter-on-quarter by over 53 percent in the quarter ended September 30, 2020, followed by the 13.1 percent increase in the most recent quarter.
Retail sales for the quarter ending December 31, 2020 were 128,469 vehicles, 13.1 percent higher than the 113,569 vehicles sold in the preceding quarter, but down 9 percent on the same period last year. The company said China sales were particularly encouraging as they were up 20.2 percent on the prior quarter and 19.1 percent year-on-year.
Vikas Jain, Senior Research Analyst at Reliance Securities suggests holding Tata Motors with target at Rs 240. The stock continued its positive momentum post its breakout from its 34-month average of Rs 175 levels with the positive news flow.
It should face some resistance near Rs 240 levels which is the 200-week average after a sharp up move over the past few days, he added.
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