Brokerages remain bullish on this Rakesh Jhunjhunwala stock despite weak Q2 results

Domestic automobile giant Tata Motors reported a consolidated net loss of Rs 187.7 crore for the quarter ended September 30, 2021. The home grown auto major loss comes amid subdued demand for its vehicles and semiconductor shortage. As Tata Motors posted a weak report on Monday, largely brokerages remained bullish on the automotive giant in the long-term as majority of them maintained buy rating on the company.  

Saying Tata Motors’ (TTMT) Q2FY22 operational performance was in line with consensus estimates as consol,  ICICI securities has maintained buy rating with a revised target of Rs 661 on the domestic automobile giant.  

"We like TTMT’s continued market share gains in the domestic PV business, CV upcycle and delivery on FCF generation coupled with structured aggression in EVs. We believe India EVCo value unlock raises its long term right to win in EVs in India and JLR’s too could also follow a similar template (of value unlock) as Jaguar turns pure-electric in FY24. Maintain BUY with a revised SoTP-based target price of Rs 661 (earlier: Rs646)," said the brokerage.

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Jefferies too maintained a buy rating on Tata Motors share with a target price of Rs 625. The company's EBITDA fell 23 percent sequentially, pulled down by semiconductor shortages at Jaguar Land Rover, but in line with estimates of the street, it said.  

Expressing optimism in Jaguar Land Rover, which stated that the worst of chip shortages is behind and volumes should gradually improve on back of good demand and strong orderbook, the brokerage maintained the buy rating.  

Elara Securities updated target price with an upside of 21%. It said strong PV order book for Tata Punch and Tigor EV works well for the auto giant, while JLR management has guided for semi-conductor shortage to improve significantly in H2FY22, complete normalcy timeline stands at 12-18 months, also boost confidence in the company.  We raise FY23E/24E JLR EBITDA 8%/7% on strong pending order book and improved product mix. We reiterate buy on TTMT with SoTP TP of Rs 587 from Rs 540 earlier," it said.  
Brokerage HSBC also did not change rating of Tata Motors after the Q2 results and maintained its buy rating for target of Rs 550.  

Tata Motors Share Movement
Meanwhile, Tata Motors stocks jumped 5 per cent to touch a day’s high of Rs 509.95 per share on the BSE in Tuesday's intraday trade. The shares lost early gains to trade Rs 5 higher from previous closing at Rs 490.85, a 1.06% jump.  

Rakesh Jhunjhunwala holding in Tata Motors 
Rakesh Jhunjhunwala holds 1.11 per cent holding in Tata Motors as per September shareholding pattern on the exchanges. The big bull had trimmed 0.3 per cent stake in the auto company in the quarter ended September 2021.