Tata Stock To Buy: Hit 52-Week High, Jumps Over 400% In 3 Yrs, Board Recommends Final Dividend

Broking firm Motilal Oswal has come up with a Buy rating on Tata Group's firm Tata Motors Ltd. (TTMT) for a target price of Rs. 650/share.

According to the broking firm, the stock is likely to give a decent gain up to 16% considering the given target price and the current market price of the stock.

TTMT is Tata Group's flagship Automobile sector firm. It is a large-cap company having a market capitalisation of Rs. 1,86,626 crore.

100% Dividend

Tata Motors in their Board meeting held on May 12, 2023, recommended a final dividend of Rs. 2 per Ordinary Share of Rs. 2 each i.e. 100% and Rs. 2.10 per 'A' Ordinary Share of Rs. 2 each i.e. 105% for the Financial year 2022-23.

In an exchange filing, the Board of Directors of Tata Motors Ltd. said, "We would like to inform that the Board of Directors at its Meeting held today has recommended declaration of final dividend of ₹2 per Ordinary Share of ₹2 each (@100%) and ₹2.10 per 'A' Ordinary Share of ₹2 each (@105%) for the financial year ended March 31, 2023. The dividend, if declared at the AGM, shall be paid to the eligible shareholders from August 14, 2023 onwards."

Valuation & view - Buy for a Target Price of Rs. 650/share

According to the brokerage firm, TTMT should witness a healthy recovery as supply-side issues ease (for JLR) and commodity headwinds stabilize (for the India business). It will benefit from: a) the CV upcycle and stable growth in PVs, b) company-specific volume/margin drivers, and c) a sharp improvement in FCF, as well as a reduction in net debt in both JLR and the India business. "The stock trades at 19.2x/16.7x FY24E/FY25E consolidate P/E and 4.9x/4.2x EV/EBITDA. Reiterate BUY with our SOTP-based TP of INR650 (Jun'25)," the brokerage has said.

Stock Outlook

On NSE, the Current share price of TTMT is Rs. 560.75/share, up 0.19% from its previous close of Rs. 559.70/share. The stock hit the new 52 week high on June 8, 2023, at Rs. 576.55/share, while the 52 week low on December 26, 2022, at Rs. 375.20/share.

The stock jumped 5.17% in the last 1 week, and 11.9% in the last 1 month, respectively. It has given 31.53% positive return in the last 1 year. In the last 3 years, it has given 405.7% multibagger return. In the last 5 years, it has given 81.84% positive return.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. 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.