Tata Motors' shares touch fresh 52-week high; stock surges 37% in 2023 so far

Tata Motors' share price touched a fresh 52-week high of Rs 542.45 apiece after gaining more than 1 per cent on the BSE during Monday’s session. The auto company's stock has gained around 37 per cent so far in 2023 on the back of multiple positive triggers and a better outlook.

Tata Motors shares were in demand during today’s trading session mainly on the news that Tata Group signed a $1.6 billion (Rs 13,000 crore) electric vehicle (EV) battery plant deal and management’s commentary on the good growth outlook in passenger vehicles as well as healthy May auto sales figures.

According to a Reuters report, Tata Group signed an outline deal on Friday on building a lithium-ion cell factory, based on an investment of about Rs 13,000 crore ($1.58 billion), as part of the nation's efforts to create its own electric vehicle supply chain.

The automobile giant also expects passenger vehicle industry growth to moderate to 5-7 per cent in the current financial year, as compared with 27 per cent sales growth in the last financial year with a dip in pent-up demand, according to a PTI report.

In order to sustain growth, the auto major is looking to introduce new products, including CNG and electric models, while bolstering its existing range with new interventions, Tata Motors Managing Director, Passenger Vehicles and Electric Vehicles, Shailesh Chandra, said in an analyst call.

Tata Motors May sales

Tata Motors on June 1, 2023, reported 1.62 per cent decline in total sales at 74,973 units in May as compared to the same month last year. The company had posted a total sale of 76,210 units in May 2022, Tata Motors said in a statement.

Sales of passenger electric vehicles, including international business, were at 5,805 units as against 3,505 units in the same month a year ago, a growth of 66 per cent.

Brokerages View

Tata successfully turned around the India PV segment owing to the new model cycle and its differentiated approach of converting Internal Combustion Engine (ICE) to EV, global brokerage UBS Securities said in a report.

However, the brokerage expects Tata Motors PV market share to peak as its launch pipeline is much weaker than market leader Maruti's and EV competition is intensifying. Amid this, UBS gives a ‘sell’ rating on the stock with a target of Rs 450 per share.

On the contrary, domestic brokerage firm Motilal Oswal is bullish on the Tata Motors’ growth story and hence give a ‘buy’ call on the stock with a target of Rs 590 per share.

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