Rakesh Jhunjhunwala Portfolio Pick: Check target price of this TOP PERFORMING auto share

Rakesh Jhunjhunwala Portfolio Stock: Rakesh Jhunjhunwala holds Titan, Lupin, Escorts, Rallis India and many other stocks in his portfolio. All this stocks have given multiple returns to this ACE Investor over years. Rakesh Jhunjhunwala is known for his vision and fundamental analysis while picking stocks for Investments. Apart from Investing community, Rakesh Jhunjhunwala commands great respect from trading community as he is a strong trader as well. Big Bull Rakesh Jhunjhunwala publicly holds 37 stocks with a net worth of over Rs 19200 cr, showed the latest corporate shareholdings filed on BSE. Rakesh Jhunjhunwala holds 1.3% stake or 4.27 cr shares in Tata Motors, valued at Rs 1475 cr. The Big Bull is known for buying quality stocks in his portfolio. Tata Motors was a new addition in Rakesh Jhunjhunwala’s portfolio during Covid period. Titan is the other Tata group stock that Jhunjhunwala holds in his portfolio.
 
Tata Motors is India's largest commercial vehicle company and fourth-largest PV player. In PV, the company has products in the compact and mid-size cars and utility vehicle segments. Through subsidiaries and associates, the company has operations in the UK, South Korea, Thailand and Spain. The key among them is Jaguar Land Rover, the business comprising two iconic British brands – Jaguar and Land Rover. Tata Motors markets cars, buses and trucks in several countries across Europe, Africa, the Middle East, south-east Asia and South America. Edelweiss says that the target price on Tata Motors is Rs 372.

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Key highlights for Tata Motors:

Edelweiss expects demand across some of Tata Motors key markets to normalise as we believe the worst is behind. Besides that, tight control on costs should also bolster profitability. Edelweiss remains positive on JLR’s upcoming product pipeline, which will improve the mix in favour of the more profitable Land Rover brand.

Edelweiss believes the capex cycle has peaked, as such, reducing capex spend should also help JLR’s FCF profile. For the India business, after two years of slowdown, we expect volumes to recover gradually. This, coupled with a sharp cost focus, should help revive profitability. Tata Motors' balance sheet improvement continues to surprise positively. Important to note that in standalone and India, cash profits continue to be higher than capex; hence, FCF generation is not solely driven by better working capital.

Tata Motors Management indicated that generating FCF remains the central focus. Edelweiss believes FY22 guidance for JLR (EBIT of 4% and FCF neutral) is ultra conservative factoring near-term uncertainty (semiconductor shortage and commodity inflation). 100K units order book for Defender, tight leash on capex and launch of RR in the next 12 months remain key drivers.

Key Risks for Tata Motors:

Macro risks (Brexit, Trade Wars)
Increase in competitive intensity, especially in the EV/ autonomous driving space
A prolonged slowdown.