Tata Motors share price jumps 4% ahead of monthly sales numbers - Should you buy?

The month of July has started with a bang as stock exchanges have been witnessing buying sentiments. Among sectors, auto stocks were top gainers. The S&P BSE Auto surged by 243.43 points or 1.36% trading at 18,147.58 at around 1412 hours. Interestingly, it was Tata Motors shares that took lead on the index with investors buying this stock to an extent that it even touched an intraday high of Rs 169.15 per piece surging by overall 4% so far today. However, the stock ended at Rs 167.85 per piece up by 3.23% on Sensex. Auto sector will be in focus this week, as major companies including Tata Motors will be announcing their June 2019 sales numbers in the first two days of July 2019. Tata Motors is yet to announce its June 2019 auto sales numbers. 

For June 2019 sales, Anish Rankawat, Research Analyst at Nirmal Bang said, "Expect PV sales to decline sharply as company is deliberately reducing channel inventory. CV sales are expected to be affected by existing fleet capacity increase due to revised axle load norms and financing constraints."

Rankawat predicts total sales to be at 44,664 vehicles in June 2019, slightly higher by 6.9% compared to 41,792 units in May 2019, however, still lower from June 2018 data. Passenger vehicle segment is seen to revive by rising 16.8% on month-on-month basis, with sales of 12,834 vehicles. 

Well, how will Tata Motors sales do in June 2019, will be keenly watched, but should you buy this share? Find out what experts say:

Joseph George  and Suraj Chheda, analysts at IIFL Securities said, “We attended JLR’s Analyst Meet in the UK. The demand environment in all markets (ex-China) is largely stable for JLR. New model pipeline is decent in 2019. Aggressive cash conservation/cost-cutting initiatives in JLR are expected to yield significant benefits in FY20 vs. FY19. However, China is still a work-in-progress; pending issues range from rebuilding the brand (especially Jaguar) to improving dealer profitability. With new models and cost-cutting initiatives, we believe FY20 volume/margins (2Q onwards) should be better than FY19.” The duo has given a buy rating on Tata Motors with a target price of Rs 225. 

Arya Sen, Equity Analysts at Jefferies while giving a buy target on Tata Motors of Rs 250, said, “Tata Motors hopes to continue market share gains/margin improvement in its domestic business, but acknowledged the challenges of a cyclical slowdown. Modular platforms are key to its product strategy in PVs & CVs, reducing investment and time to market. TTMT is on track for BS-6 shift by FY21E.”

Considering the target price, Tata Motors shares are an appealing stock and can be bought at this level.