Shares of Tata Motors gained in Wednesday's trade after the company said it will be implementing a price increase of up to 5 per cent on its commercial vehicles starting from April 1. This was Tata Motors’ second such price hike in four months. The decision to increase prices is a result of the company's efforts to comply with the more stringent BS6 phase II emission norms, the largest commercial vehicle manufacturer in India said.
Tata Motors said the price increase will be applied across the entire range of commercial vehicles, with the exact amount varying according to the individual model and variant.
Following the development, the scrip rose 1.44 per cent to hit a high of Rs 418.35. At this price, the auto stock is still 18.2 per cent away from its 52-week high of Rs 494.50 hit in August last year.
The automaker recently reported domestic commercial vehicles sales of 36,565 units for February, down 3 per cent from 37,552 units a year ago. Overall, it reported a 3 per cent year-on-year growth in total wholesales at 79,705 units in February. In the year-ago period, the company's total vehicle sales stood at 77,733 units.
Tata Motors had the second highest number of retail investors at 39.30 lakhs as of December 31. Thanks to the recent slide, the stock has delivered flat return in 2023 so far. Motilal Oswal said a strong recovery in JLR, sustained resurgence of the India business, and a possible monetisation of its stake in Tata Technologies are the key catalysts for the stock over the next one year.
It has a target of Rs 540 on the stock. Kotak Institutional Equities has a target of Rs 450 on the stock. Prabhudas Lilladher sees it at Rs 520 while JM Financial finds it Rs 575 worthy.
"As Tata Motors transitions its entire vehicle portfolio to meet these standards, customers and fleet owners can expect a range of cleaner, greener, and technologically superior offerings that deliver higher benefits and lower total cost of ownership," Tata Motors said.
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