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Tata Motors: This share of Tata Group can give 26% return, Rakesh Jhunjhunwala has made a bet, what is your preparation?

The brokerage says that the recovery is visible in every segment of Tata Motors. Be it passenger vehicle or commercial vehicle segment, some have cyclical and some have structural recovery.

Tata Group Stock/Rakesh Jhunjhunwala Portfolio: Talking about Tata Group, it includes many legendary stocks. Among them, brokerage house Motilal Oswal is looking bullish about Tata Motors. The brokerage house has given investment advice on this giant stock of the auto sector and has expressed expectation of 26 percent upside going forward. Brokerage says that recovery is being seen in every segment of the company. Be it passenger vehicle or commercial vehicle segment, some have cyclic recovery and some have structural recovery. Although there is a challenge on the supply side due to the shortage of semiconductors, but the recent sales figures are giving positive signs. Let us tell you that Rakesh Jhunjhunwala, a veteran investor of the market has also invested in Tata Motors.

Recovery in every segment of business

Brokerage house Motilal Oswal says that all 3 businesses of Tata Motors are in recovery mode. There is a cyclical recovery in the Indian commercial vehicle segment. At the same time, structural recovery is being seen in the Indian passenger vehicle segment. Whereas cyclical recovery is being seen in JLR too. However, challenges from the supply side due to shortage of semiconductors can have a negative impact on the recovery. According to the report, the recovery in Indian business is expected to continue. The stock is currently 14.1 multiple of FY23E conso EPS and 2.6x P / B may see a level of Rs 530 in the stock ahead. Presently the current price of the share is Rs 438.

No effect of Russia and Ukraine war on wholesale volume

According to the report, there was no material impact on wholesale volumes during 4QFY22 due to geopolitical tensions. Production has been limited due to supply chain disruptions. Disturbance and inflation is a negative factor in the supply chain. Right now it will be difficult to say how this will affect the company in the coming quarters.

latest company data

JLR’s wholesale volume declined by 38 per cent year-on-year in 4QFY22, while it grew 11 per cent on a quarterly basis to 76.5k units. During this, production QoQ improved by 15 percent to 82.7k units. The Wholesale Volume of Defender, Range Rover Sport and Discovery grew by 23%, 14% and 29% on QoQ basis in 4QFY22.

Talking about retail, JLR declined by 36 per cent year-on-year and stood at 79k units. However, it has increased by 1 per cent on a quarterly basis. The real sales of LR/Jaguar have grown by 36 per cent and 38 per cent year-on-year. Coming to all the regions, retail sales declined on a year-on-year basis in 4QFY22.

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