2 Tata Stocks Motilal Oswal Had A “Buy” Call This Week

Markets have been witnessing a sudden fall over the last 2-weeks. Brokerage firm, Motilal Oswal continues to remain bullish on 2 Tata stocks and has recommended a "buy" on them.

Buy TCS stock for a 30% upside, says Motilal Oswal

Motilal Oswal has a buy call on the stok of TCS with a price target of Rs 3810, which is an almost 30% upside from the current levels.

According to Motilal Oswal, Gopinathan's departure from TCS was surprising, as he has led the company for only six years and was expected to continue for the long term given his age (52 years). Moreover, while the company's growth has trailed peers like Infosys recently, it has handled external pressures, including a transition to Digital delivery and the Covid impact relatively welldespite its size.

"We expect a USD revenue CAGR of 11% and an INR EPS CAGR of ~16% over FY23-25. Our target price of Rs 3,810 implies 24x FY25E EPS, with a 20% upside potential. We have a BUY rating on the stock and would recommend adding to the name on any near-term weakness due to this news," the brokerage has said.

Buy Tata Motors stock for a 31% upside

Another Tata stock where Motilal Oswal was bullish this week was the stock of Tata Motors. According to the brokerage, stable freight rates, profitability of fleet operators and collection data from financiers indicate healthy demand. "Moreover, the anticipation of healthy replacement demand and scrappage policy would be additional growth drivers. The management focuses on increasing value through innovations in terms of goods, services and other solutions, rather than increasing the market share through discounts. LCVs, which have witnessed a robust post-Covid recovery, are likely to moderate," the brokerage has said.

According to Motilal Oswal, Tata Motors should witness a gradual recovery as supply-side issues ease (for JLR) and commodity headwinds stabilize (for the India business). It will benefit from: 1) a macro recovery in India, 2) company-specific volume/margin drivers, and 3) a sharp improvement in FCF and leverage in JLR as well as the India business. The stock trades at 15.2x/12.3x FY24E/FY25E consolidated P/E and 3.8x/3.2x EV/EBITDA. We reiterate our BUY rating on the stock with a target price of Rs 540 (Mar'25E-based SoTP)," the brokerage has said.