Tata Motors shares climbed 8% following positive global wholesales data, with brokerages upgrading their price targets. The recovery in Tata Motors’ businesses, including Jaguar Land Rover, and strong sales of electric vehicles are driving the positive sentiment.
Tata Motors’ Shares Soar as JLR Sales Drive Growth
Tata Motors, the leading Indian automobile manufacturer, witnessed a significant surge in its shares, rising by 8% in Monday’s trade. This positive momentum in the stock followed the release of the automaker’s global wholesales data, which showed a year-on-year (YoY) growth of 8% to 3,61,361 units in the March quarter, including Jaguar Land Rover (JLR) sales.
Bullish Outlook from Brokerages on Tata Motors Stock
The positive news has led several brokerages to turn bullish on Tata Motors stock. Motilal Oswal Securities, a renowned brokerage firm, has given a ‘Buy’ rating on the stock with a target of Rs 525, stating that all three businesses of Tata Motors are in a recovery mode. The India commercial vehicles (CV) business is expected to witness a cyclical recovery, while the India passenger vehicles (PV) business is seeing a structural recovery. JLR is also experiencing a cyclical recovery, supported by a favorable product mix, although supply-side issues may delay the recovery process. Despite no near-term catalysts from the JLR business, the recovery in the India business is expected to continue.
Goldman Sachs Raises Price Target on Tata Motors Stock
Goldman Sachs, another reputed brokerage, has raised its price target on Tata Motors stock to Rs 550 from Rs 480, factoring in the improving volume outlook at JLR. Sharekhan also noted that Tata Motors reported a consecutive fourth-month increase in electric vehicle (EV) sales, with monthly EV volume surpassing 6,500 units in March 2023, compared to 5,318 units in February 2023.
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Strong Global Wholesales Performance for Tata Motors
Tata Motors’ global wholesales of passenger vehicles in the March quarter stood at 1,35,654 units, showing a YoY growth of 10%. Jaguar wholesales for the quarter were 15,499 vehicles, while Land Rover wholesales were 91,887 vehicles, including CJLR volumes of 12,737 units, according to Tata Motors.
Domestic Market Performance and EV Sales
In the domestic market, Tata Motors reported YoY growth of 2% in commercial vehicles (CV) volume for March, with 45,307 units sold, driven by better medium and heavy commercial vehicles (MHCV) sales, although light commercial vehicle (LCV) sales declined. PV sales grew by 4% YoY to 44,044 units, in line with industry growth. However, overall exports declined by 39% YoY. EV sales accounted for 15% of the overall PV volume in March, with 6,509 units sold. For FY23, PV sales grew by 46% YoY, while CV sales increased by 22%, led by higher growth in MHCV at 35% and LCV at 10% YoY.
Positive Outlook from Brokerages and Target Prices
Tata Motors’ impressive performance and positive outlook have garnered attention from various brokerages. Nomura India has set a target of Rs 508 on the stock, CLSA finds the stock worth Rs 544, JPMorgan has a target of Rs 438, and BofA Securities sees the stock at Rs 475.
Conclusion
In conclusion, Tata Motors’ shares have surged on the back of strong JLR sales and an improving volume outlook. The recovery in all three businesses, including the India CV and PV segments, as well as the positive momentum in JLR sales, has boosted investor confidence in Tata Motors’ stock. The bullish outlook from brokerages and upward revisions in price targets further highlight the growing optimism towards the company’s performance. Additionally, the increasing sales of electric vehicles and the company’s focus on sustainable mobility are also viewed as positive factors for future growth. However, challenges such as supply-side issues and global economic uncertainties remain risks to watch out for. Overall, Tata Motors’ strong performance and positive outlook are driving investor interest, positioning the company for potential growth in the coming quarters. Investors and stakeholders will continue to closely monitor the company’s financials, product portfolio, and market trends to gauge its performance and prospects in the dynamic automotive industry.
