Jhunjhunwala’s portfolio: ICICI Securities is bullish on this Tata group stock

Market


With a market valuation of Rs. 1,36,655.76 Cr., Tata Motor is a large-cap corporation that operates in the consumer discretionary industry. The research experts at the brokerage company ICICI Securities are bullish on the stock and have advised investors to buy it at a price between Rs. 408.00 and Rs. 420.00. They have also set a target price of Rs. 470 for the stock within a target time frame of 3 months.

“The Nifty Auto index staged a rebound after retesting its five year’s range breakout, indicating resumption of the structural up trend. Within the space, Tata Motors looks lucrative at current juncture as buying demand emerged from lower band of past 14 month’s consolidation ( 494-375) coinciding with 52 week’s EMA. Hence, it offers a fresh entry opportunity with a favourable risk reward,” said the analysts.

“Key point to highlight is that over the past 15 months the stock has retraced 61.8% of its two month’s rally seen during September-October 2021 ( 268-537), highlighting inherent strength. We expect the share price to head towards 470, which is 61.8% retracement of the decline since November 2021 high 537 to December 2022 low of 375. Among oscillators, weekly RSI recorded a bullish crossover, thus validating our positive stance,” said the research analysts of ICICI Securities.

They further claimed that “Tata Motors is an auto OEM from the house of Tatas operating in the domestic (PV, CV) as well as global markets (Jaguar Land Rover i.e. JLR). Its FY22 consolidated sales mix includes: JLR ~67%, India CV ~19%, India PV ~11%. Domestically, the company is in a sweet spot with cyclical upswing in the domestic CV space and robust consumer response to its new portfolio in the PV domain. It is even leading the electrification drive domestically with dominant 80%+ market share in the electric PV space with Nexon EV as its top selling model. On the JLR front, demand prospects are healthy with pending order backlog of 2.15 lakh units as of CY22 end. With supply chain issues easing we expect it to swiftly ramp up production and report a better financial performance, going forward. It is also readily adopting the EV transition with Jaguar going all electric by 2025 and new EV model launches planned in LR domain. Incrementally, positives are the closure of Ford’s Gujarat plant deal in the domestic electric passenger vehicle domain (capacity expandable up to 4.2 lakh units) and board approval for partial stake sale of the company’s holding (74.4% stake) in Tata Technologies (E&RD firm working on new technologies like ADAS) through IPO route (adds ~ 50/share to our fair value calculation).”

On the NSE, the shares of Tata Motors closed today at 411.70 apiece level, down by 0.13% from the previous close of 412.25. The late market tycoon Rakesh Radheshyam Jhunjhunwala, held 3,67,50,000 shares of the company or 1.11% stake during the quarter that ended in Q2FY23, according to statistics accessible on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

 


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