Rakesh Jhunjhunwala portfolio stock, Tata Motors shares hit 5-month high: Billionaire investor Rakesh Jhunjhunwala-backed Tata Group company – Tata Motors share price hit an over five-month high of Rs 484.25 per share after surging by nearly 2 per cent on the BSE intraday during Thursday’s trading session.
The auto major’s share price has been trading at its highest level since February 23, 2022. The counter has outperformed the market by surging nearly 25 per cent as against a 10 per cent rise in the S&P BSE Sensex in the last three months.
During the April-June quarter of this fiscal, Tata Motors reported growth in its India business. However, posted disappointing numbers for Jaguar and Land Rover (JLR). In this regard, the company came out with lower-than-expected consolidated numbers in Q1FY23, as per brokerages.
Edelweiss Research said, “We believe, JLR Q1 performance is a classic case of a perfect storm. More importantly, a large part of the loss can be recouped with ramp up in production. Hence, we lower our FY23E EBIDTA by a mere 5% and Retain Buy rating with a revised target of Rs 514 per share.”
The company’s management has guided for a positive EBIT (earnings before income tax) and FCF (free cash flow) for FY23 at JLR driven by continued recovery in production, ‘Refocus’ programme and continued efforts towards cost efficiency.
Favourable mix, sales recovery and cost saving initiatives are expected to support margins going ahead while focus on debt reduction target of near debt free by FY24 and will aid balance sheet strength, another domestic brokerage JM Financial said in its Q1 review report.
In addition, Tata Motors’ EV portfolio is leading the domestic EV space and by securing strategic investors and well poised to build on its initial success, the brokerage said, maintaining a Buy rating with a target of Rs 550per share.
Earlier this week, Tata Motors subsidiary Tata Passenger Electric Mobility Ltd (TPEML) bought Ford India’s manufacturing plant situated at Sanand, Gujarat, including entire land and buildings, vehicle manufacturing plant along with machinery and equipment for a consideration of Rs 725.7 crore.
Tata Motors is one of the favourite stocks in ace investor Rakesh Jhunjhunwala’s portfolio. He has 3,62,50,000 shares or 1.1 per cent stake in the company, as per June shareholding pattern. The investor during June quarter has slashed 0.1 per cent stakes in the company, as per holding on BSE.