Tata Motors shares could see over 40% upside as brokerages bullish

Tata Motors shares have gained 54% in a yearPremium
Tata Motors shares have gained 54% in a year
 1 min read . Updated: 12 Apr 2022, 03:27 PM IST Livemint

Listen to this article

JLR released its Q4FY22 wholesales volumes and the reported volumes of 76.5k units (ex-CJLR) are around 16% below of brokerage Edelweiss' expectation. Chip shortage continued to dent volumes in Q4FY22. More worrying is the expected pressure in Q1FY23, the brokerage said in a note.

“Contrary to the general trend, Q4FY22 did not turn out to be the best quarter for JLR; the best quarter was Q1FY22 with volumes of 84,442 units. On the whole, concerns have emerged pertaining to FY23 volumes, which we factor in at 426K units in our model. Accordingly, we await management commentary to assess the nature of chip supply issue," the note stated.

Though, brokerage and research firm Edelweiss believes that India and JLR are on the cusp of strong demand and product cycle tailwinds, which should facilitate balance sheet improvement. The brokerage has maintained its ‘Buy’ rating on Tata Motors shares with a target price of ₹616, implying a potential upside of 40% from current stock level.

In a note last week, analysts at global brokerage Jefferies said they liked Tata Motors' SUV and EV focussed strategy in the passenger vehicle (PV) segment. It has taken an early lead in electric vehicles (EVs), and the recent investment by TPG has provided the balance sheet strength to drive electrification.

Tata Motors intends to expand its portfolio from 2 EVs presently to 10 by FY26. The global brokerage has Buy rating on the Tata Group stock with a target price of ₹540. Though, risks include a sharp demand downturn in Indian trucks and global luxury autos and JLR's inability to deliver on EVs, as per Jefferies.

MINT PREMIUM See All

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Download the App to get 14 days of unlimited access to Mint Premium absolutely free!

Close