Reduce Tata Motors, target price Rs 255: Prabhudas Lilladher

Prabhudas Lilladher has a reduce call on Tata Motors with a target price of Rs 255. The current market price of Tata Motors is Rs 326.35 .

Tata Motors, incorporated in the year 1945, is a large cap company with a market cap of Rs 108,989.10 Crore, operating in auto sector.

Tata Motors key products/revenue segments include motor vehicles, spare parts & others, miscellaneous goods, sale of services and other operating revenue for the year ending 31-March-2020.

Investment rationale
The brokerage reduced the target on Tata Motors as it believes, concerns on JLR scale continues to remain and the brokerage is not confident that this business would be able to meet its targets of double digit EBIT margins, positive FCF and net debt neutral over medium term.

Financials
For the quarter ended 31-December-2020, the company has reported a consolidated total income of Rs 76,365.79 crore, up 40.99 per cent from last quarter's total income of Rs 54,163.22 crore and up 5.22 per cent from last year same quarter's total income of Rs 72,576.20 crore. Company has reported net profit after tax of Rs 3,222.21 crore in the latest quarter.

Promoter/FII Holdings
Promoters held 42.4 per cent stake in the company as of December 30, 2020, while FIIs held 15.6 per cent, DIIs 12.7 per cent and public and others 29.3 per cent.