Tata Motors gains after JLR retail sales grow 21% YoY in Q2—should you buy, sell or hold the stock?

Tata Motors share price NSE, Tata Motors share price target: Tata Motors shares on Friday, October 6, traded in the green territory on the bourses. The stock was in demand after Tata Motors-owned Jaguar Land Rover's (JLR) retail sales, including the Chery Jaguar Land Rover China JV, grew 21 per cent year-on-year (YoY) at 106,561 units for the July-September quarter (Q2FY24). The company registered retail sales of 88,121 units in the corresponding quarter of the previous fiscal, the company informed in a note on October 5. The counter rose as much as 1.3 per cent to touch the day's high of Rs 627.35 in the early morning deals on NSE. Tata Motors finished 0.56 per cent higher at Rs 623.1 on the NSE.

Here's how the counter moved on Friday: 

Source: NSE

JLR's wholesale volumes stood at 96,817 units, excluding the China JV, up 29 per cent, compared to the same quarter a year ago. The wholesale volumes for the first half of the fiscal were 1.90 lakh, 29 per cent higher compared to the previous year.

"Retail volumes were higher in all regions year-on-year," the company said in a statement on Thursday, October 5. "Overseas up 56 per cent, North America up 32 per cent, Europe up 16 per cent, UK up 9 per cent and China up 7 per cent," the company's note read.

JLR's order book remains strong at 168,000 units, reducing in line with the fulfillment of client orders, with demand for our most profitable Range Rover, Range Rover Sport, and Defender models accounting for 77 per cent of the orders. Based on preliminary cash balances, the company also expects positive free cash flow of around £300 million in the second quarter of the current fiscal.

Tata Motors share price target: Should you buy, sell, or hold the stock?

Post-development, BoFA Securities has maintained a buy call on Tata Motors. It has placed the target price at Rs 750, which translates to an upside potential of 21 per cent from Thursday's closing. "This is along expected lines and implies a steady booking run rate of 90K in Q2, the brokerage said in its note.

In addition, Nomura, too, has continued with a buy call with a target price of Rs 786, which means an upside potential of nearly 27 per cent on the counter from Thursday's closing. The brokerage sees a strong order book and healthy growth in retail demand. The global brokerage believes that with improved production in H2FY24, JLR is on track to meet estimates.

Morgan Stanley, on the other hand, has maintained its overweight with a target price of Rs 711, which translates to an upside potential of nearly 15 per cent from the previous close.

Tata Motors share price history

Tata Motors stock has given a positive return of over 50 per cent in the last 12 months (from October 6, 2022), outperforming the Nifty auto index, which has gained over 25 per cent.

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