Rakesh Jhunjhunwala stock: Billionaire investor Rakesh Jhunjhunwala’s one of the favourite stocks – Tata Motors share price slumped nearly 4 per cent to Rs 427.35 per share on the BSE intraday and was also top laggard on the Nifty50 index during Thursday’s trading session. 

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The decline in the counter is mainly seen on the back of lower than estimated June quarter earnings of the financial year 2022-23 (Q1FY23). The company’s consolidated net loss widened to Rs 4,951 crore June quarter as against a consolidated net loss of Rs 4,450 crore in a year-ago quarter. 

However, several brokerages gave a Buy rating on the counter, mainly on the strong business in Q1 in the passenger vehicle (PV) and commercial vehicle segment (CV) as well as on maintained Jaguar and Land Rover guidance. They see an upside of up to 17 per cent in the stock. 

Motilal Oswal believes the Tata Group company Tata Motors should witness a gradual recovery as supply-side issues ease (for JLR) and commodity headwinds stabilize for the India business. 

The company will benefit from: a) macro recovery, b) company-specific volume and margin drivers, and c) a sharp improvement in FCF and leverage in both JLR as well as the India business, it added. 

The brokerage maintained a Buy rating, with a target price of Rs 520 per share, implying over 17 per cent upside in the scrip. The stock trades at 16.8x FY24E consolidate P/E and 4.2x EV/EBITDA ratio. 

Similarly, global brokerage firm Nomura gives a Buy rating on Tata Motors with a target price of Rs 520 per share. It said deleveraging is a key driver for the stock, while JLR to benefit from improved chip supply. The brokerage added M&HCV recovery on track, and PVs to ramp up further. 

Edelweiss Research believes that the JLR Q1 performance is a classic case of a perfect storm and more importantly, a large part of the loss can be recouped with a ramp-up in production.  

The brokerage lowered FY23E EBIDTA by a mere 5 per cent and retained a Buy stance with a revised target price of Rs 514 from Rs 485 per share, implying a nearly 16 per cent upside.  

At the time of filing this report at 10:30 am, Shares of Tata Motors were trading over 1.5 per cent at Rs 436.85 apiece on the BSE as compared to 1.12 per cent rise in the S&P BSE Sensex.