Tata Motors to hike prices from May 1; shares under pressure

Tata Motors share price: Tata Motors shares moved within a narrow range around the flatline on Monday, after the Tata group auto major announced a hike in the prices of its passenger vehicles effective May 1. On Friday, the Tata Motors stock was last seen trading flat at Rs 470 apiece on BSE in an overall weak market, having gyrated in the Rs 465.8-472.9 band earlier in the day. 

Tata Motors said that the price increase was to partially offset the increase in input costs. The weighted average increase would be 0.6 per cent, depending on the variant and model, according to a company statement. "Tata Motors has been absorbing a significant portion of the increased costs on account of regulatory changes and rise in overall input costs and is hence compelled to pass on some proportion through this hike," it said.

This will be the second hike in the prices of Tata Motors passenger vehicles since February.

ALSO READ: Tata Motors price hike: Company to increase prices of its passenger vehicles, effective from this date

What analyst suggests

Jefferies is bullish on Tata Motors and with a ‘buy’ call and a target price of Rs 600 apiece. The brokerage is positive on Indian auto companies with the sector being in middle of a strong earnings cycle.

Jefferies sees a healthy 11-18 per cent volume CAGR for PVs, two-wheelers and trucks over FY23-25E, with growth in two-wheelers expected to outpace four-wheelers.

Ventura Securities has a ‘buy’ call on Tata Motors with a target price of Rs 715 apiece. The brokerage expects a strong recovery in Tata Motors’ financials citing easing of supply-side issues (for Jaguar Land Rover) and commodity headwinds (for passenger vehicles and commercial vehicles). 

Tata Motors shares: Historical performance 

Tata Motors shares have grown 19 per cent in value so far in 2023, a period in which the Nifty headline index has fallen 3.2 per cent. 

Catch the latest stock market updates here. For more news on sports, politics follow Zee Business