Tata Motors hits 52-week high: Jefferies, Nomura among 5 global brokerages sees up to 30% upside in this Rakesh Jhunjhunwala owned stock

The rally seen in Tata Motors Ltd is nothing short of fast & furious. The stock which has already doubled so far in the year 2021, rose more than 200 percent in the last one year.

The Tata Motors shares were trading 16 per cent higher from the Tuesday closing price at Rs 487.95 on the NSE at 10:30 am. 

Tata Motors is the second-most favourite and heavily invested stock of ace investor Rakesh Jhunjhunwala, who is also termed as the Big Bull of the Indian stock market. He held 37,750,000 shares (1.1 percent stake) worth over Rs 1500 crore in the company at the end of the June quarter, as per Trendlyne.

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Shares of Tata Motors has already given multibagger returns and the good news is that the rally may not be over going by the commentary from top global brokerage firms.

Top global brokerage firms such as HSBC, Nomura, as well as Jefferies see the stock rallying towards 550-565 levels in the next one year that translates into an upside of over 30 percent from October 12 closing price of Rs 420.

The stock which has rallied around 40 percent in the last month was largely on the back of rise in domestic, and JLR volumes as well as a buzz in the electric vehicle space.

The recent deal with TPG Rise with help the automaker unlock value as well as increase market share in the electric vehicle space, suggest experts at top brokerage firms, and  

TTMT has announced that TPG Rise Climate (TPG) will invest $1bn, in a wholly owned subsidiary proposed to be incorporated to undertake the passenger electric mobility business (EVCo).

TPG's investment would be for an 11% to 15% stake at a post-money valuation of $6.7bn to $9.1bn. The 11-15% stake would depend on revenue achievements by FY27.

TPG would be the lead investor, and Abu Dhabi Developmental Holding Company (ADQ) would be the co-investor.

Emkay Global which maintains a buy rating on Tata Motors is of the view that the TPG-TTMT deal may redefine India's auto landscape - investments of such magnitude indicate confidence about India's future EV potential.

“We believe that large investments, more product options and favorable government policies will accelerate the pace of EV adoption,” it said. The brokerage firm raised the target price to Rs 515 from Rs 440 earlier.

We have collated recommendations of the top five global brokerage firms that appeared on the Zee Business TV channel on Tata Motors:

HSBC: Buy| Target raised to 550 from 340  

Jefferies: Buy| Target raised to 565 from 435.
 
Macquarie: Neutral| Target Rs 297 (No change)

Macquarie maintains a neutral rating on Tata Motors with a target price of Rs 297.
The company is Leapfrogging the EV journey after it signs a deal with TPG to sell an 11-15% stake in domestic E4W business.
 
The focus is likely to drive domestic E4W penetration with market leadership.
 
Nomura: Upgrade Buy| Target raised to 547 from Rs 314

Nomura upgraded Tata Motors to buy from neutral, and also raised the target price to Rs 547 from Rs 314.

The global investment bank upgraded the stock on India PV electrification plans. Capital raise provides credibility to EV investments and makes us confident of investment-led growth path.

UBS: Maintain Neutral, Target at 320.

UBS maintains a neutral rating on UBS with a target price of Rs 320. EV volumes is likely to grow 10x by FY26, and EBITDA breakeven in FY23. Separate EV subsidiary to support better profitability of PV business

Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.