Billionaire investor Rakesh Jhunjhunwala-backed Tata Group company – Tata Motors shares have the potential to grow around 32 per cent on the back of robust growth and business outlook, several brokerages said in its view while initiating coverage on the stock on Wednesday.
Tata Motors is one of the favourite stocks in Rakesh Jhunjhunwala’s portfolio. The Big Bull of the Indian stock markets, Jhunjhunwala holds 39,250,000 equity shares, which aggregates to 1.2 per cent stakes in auto heavyweight as per the latest BSE shareholding pattern of the company.
Global brokerage firm CLSA maintained an Outperform rating with a target price of Rs 453 per share, which translates into an upside of over 14 per cent as compared to Friday’s closing of Rs 397 apiece. It said the debt likely to come down as free cash flow improves and JLR volume fall may continue.
The brokerage further cutting volume estimates for both JLR and CV segments said chip shortage and supply chain bottlenecks may continue in CY22.
While commodity inflation is expected to ease a bit in the near term on the expectation of continued softening in steel prices, CLSA believes that the benefits for JLR would most likely accrue in FY24 as current commodity hedges roll over.
Similarly, JP Morgan maintained an Overweight rating with a target price of Rs 525 per share, which implies over 32 per cent upside in the stock.
The stock on Wednesday was trading weak after an upward rally on Tuesday, it slumped by over 1 per cent to Rs 393 per share on the BSE intraday, as compared to a 0.96 per cent fall in the BSE Sensex at around 12:25 PM.
The stock in the last one year has gained over 16 per cent and fell over 16 per cent in the last six months, as against over 1 and 8.5 per cent fall in the S&P BSE Sensex, respectively.