Prabhudas Lilladher Initiates Buy On Tata Group Stock, Hits 52-Week High, Jumps 481% In 3 Years

Prabhudas Lilladher in its recent report has assigned a "Buy" on Tata Motors Ltd. with a target price of Rs. 605/share. According to the given target price, the stock is likely to give up to 14% returns if purchased at the current market price. It is a large-cap company having a market capitalisation of Rs. 1,76,629 crore.

Increasing confidence in uncertain environment, Buy For Rs. 605/share

Prabhudas Lilladher, "We increase our FY24/25E EPS estimates by 10%/8%, to factor in company's guidance and 4Q results. Tata Motors' (TTMT) consolidated revenue (+c20% QoQ) was lower than our estimates by c2%, however beat consensus. The company saw improvement in revenue and EBITDA margins (Consolidate: +120bps QoQ) across divisions. Product mix improvement in JLR continued and a strong order book of 200k units (with 76% mix of higher ASP models) gives us confidence that JLR will be able to sustain its high ASP in the future, even as production improves. M&HCV demand outlook is strong and TTMT is confident of maintaining its lead in SUVs.

It added, "We maintain our positive stance given (1) JLR's volume ramp-up resulting in strong revenue, profitability and FCF (aided by high order book), 2) CV segment (on domestic side) benefitting from ongoing upcycle, operating leverage and tailwinds from lower commodity costs & lower discounting and (3) strong market share in PV segment (13.5% vs 8% in FY21) led by revamped portfolio, rising SUV share and rising EV penetration. We expect revenue/EBITDA CAGR of 12%/32% over FY24/25E. Retain 'BUY' with SoTP based TP of Rs 605 (Mar-25) (previous Rs. 590)."

Stock Outlook

The stock of Tata Motors is currently trading at Rs. 531/share, down 2.92% from its previous close. Its 52 week low is Rs. 366.20/share recorded on 12 May 2022, and its 52-week high is Rs. 537.15/share recorded on 15 May 2023. The stock jumps 0.12% in 1 week. It gave 4.83% negative return in 1 year. It has given a multibagger return of 481.68% in the past 3 years. In 5 years it has given 24.19% positive return.

About - Tata Motors

Tata Motors is Tata Group's leading global automobile manufacturing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks, buses and defence vehicles. Tata Motors is one of India's largest OEMs offering an extensive range of integrated, smart and e-mobility solutions

Disclaimer - The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.