Tata Motors: Auto giant's shares jump over 17% in just 11 days; Motilal Oswal gives this new target

Tata Motors Shares: It was the start of April 01 trading session which was also the beginning of FY20, where the fate of Tata Motors took a reverse trend. From trading below Rs 190-levels, the automaker has rocketed to over Rs 219 level in just 11 days time. This would be a massive 17.15% jump in less than two weeks. Optimism in Tata Motors was despite, the company witnessing negative global sales especially in its luxury car brand Jaguar Land Rover (JLR). Due to JLR, Tata has been on hotbed since last year, and investors were trading cautiously.  However, on the domestic front, the company has managed to record good sales figures for FY19. But looks like the party days are getting over for Tata Motors, as analysts at Motilal Oswal believe that the company will near towards Rs 195-price level ahead. Hence, the broking firm has given a neutral rating on Tata. 

On Thursday, share price of Tata Motors finished at Rs 218.20 per piece up by 1.18%. However, the company touched an intraday high of Rs 219.25 per piece, resulting in jump of over 17% in just 11 days time. On April 01, the Tata share was near just Rs 187. 

FY19 sales! 

Tata Motors posted that, sales in the domestic market for FY19 (April 2018 - March 2019), grew by 16% with 678,486 units as compared to 586,507 units over the same period Last year. In March 2019, the Company witnessed its sales drop by 1% to 68,709 units as against 69,409 units sold in March 2018, as weak consumer sentiments continued. 

On the other hand, JLR sales in FY19 were at 578,915 vehicles, down 5.8% compared to previous fiscal. During the year, the all-electric Jaguar I-PACE was introduced and sales of the Jaguar E-PACE, Range Rover Velar and the refreshed Range Rover and Range Rover Sport ramped up, however, this was offset by continuing weakness in China and the run out of the first generation Range Rover Evoque.

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Global sales including JLR were at  1,45,459 units in FY19, lower by 5%, as compared to March 2018.

Jinesh Gandhi and  Deep Shah analysts at Motilal Oswal said, “Jaguar volumes declined 0.3% YoY to 21k units (in-line), while Land Rover (LR) volumes were down 10.9% YoY to 49.2k units (in-line).”

The duo added, “Jaguar’s retail volume declined 0.2% YoY, led by a substantial volumes decline across models, barring E-pace (+32%) and I-Pace. LR’s retail volumes declined 11.4% YoY, as growth in Range Rover Velar (+5% YoY) was more than diluted by a decline across other models.”

Felix Brautigam, Jaguar Land Rover, Chief Commercial Officer said, “Despite a challenging time for us and the automotive industry, we were able to deliver growth in three of our five regions. In North America, the UK and Overseas we posted solid growth on the back of strong demand for our exciting product line-up, achieving record sales and outpacing industry trends in many markets.”

Following which, Motilal said, “The stock trades at 17.7x/13.8x FY20/21 consol. EPS. Maintain Neutral with a target price of Rs 195.”