This Rakesh Jhunjhunwala stock more than triples in 1 year; Jefferies sees 34% rally more in Tata Motors

At the end of March 31, 2021, Rakesh Jhunjhunwala held 4.27 crore Tata Motors shares or 1.29 per cent stake in the company

Tata Motors shares have more than tripled investor money in a span of one year, rising to Rs 360.65 apiece from Rs 98.20, a year ago. Brokerage firm Jefferies expects another 34 per cent rally in this Rakesh Jhunjhunwala stock from the current levels, on the confluence of improved strategy and cyclical recovery. “Improving India business provides a higher floor to fair value,” it said. It has pegged a target price of Rs 455 apiece, implying a 34 per cent rally, with a ‘buy’ rating to the stock. By FY24, the brokerage firm sees EBITDA rising 90 per cent from FY21, EPS nearing its past peak and near-zero net auto debt.

In traded volume terms, 12.29 lakh Tata Motors shares have traded on BSE, and a total of 2.57 crore units on NSE, so far in the trade. The brokerage firm Jefferies believes that cyclical demand recovery across segments, rising earnings and cash flows at JLR, new Range Rover and Range Rover Sport launches in 12-18 months and improvement in Indian PV market shares and margins will act as catalysts for Tata Motors shares. The firm highlighted that JLR financials seem to be improving as focus shifts from volumes to profit. “Indian trucks are on the cusp of a cyclical recovery and Tata’s market share losses are behind it,” it said.

Also, Jefferies sees that in India PVs, the new SUV-focused strategy and product styling are promising. It also believes that improving EBITDA and reduced investments should drive a strong improvement in JLR’s cash flows in the coming years.

At the end of March 31, 2021, Rakesh Jhunjhunwala held 4.27 crore Tata Motors shares or a 1.29 per cent stake in the company. While foreign portfolio investors (FPIs) held a 13.78 per cent stake or 45.74 crore shares. The promoter holdings stood at 46.41 per cent.

On Thursday, Tata Motors announced its sales in the domestic and international market for Q1FY22, which stood at 1.14 lakh vehicles, as compared to 24,978 units during Q1 FY21. Tata Motors’ passenger vehicle division sold 24,110 units in June, strong 3‐digit growth of 111 per cent versus 11,419 units in June 2020. Overall Tata Motors’ domestic sales have risen by 78 per cent to 43,704 units. While, total domestic commercial vehicle sales jumped to 22,100 units in June from 11,401 units in May, this year.

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