Shares of Tata Motors Ltd approached their record high today after global brokerage JPMorgan upgraded shares of the Tata Group firm to overweight from the earlier stance of neutral. The brokerage revised its price target on Tata Motors to Rs 925 apiece from the Rs 680 earlier. Tata Motors stock gained 2.62% to a high of Rs 801.85 on BSE. Tata Motors stock opened higher at Rs 797.25 on Thursday. Market cap of the firm rose to Rs 2.64 lakh crore. Total 4.72 lakh shares changed hands amounting to a high turnover of Rs 37.72 crore on BSE. Tata Motors stock hit a 52-week low of Rs 381 on January 6, 2023 and a record high of Rs 804 on January 2, 2024.
Tata Motors stock has a one-year beta of 0.2, indicating very low volatility during the period. In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 72, signaling it's trading in the overbought zone. Tata Motors shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The auto stock has surged 107% in a year.
JPMorgan’s price target is 18.2% higher from Wednesday's closing levels.
JPMorgan said that one of the primary reasons behind the upgrade on Tata Motors was the better-than-expected margin and free-cash-flow (FCF) delivery at Jaguar Land Rover (JLR). JLR reported a free cash flow of £300 million during the September quarter.
Other analysts are also bullish on the Tata Group stock.
Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said," The stock after the clear breakout above Rs 735 has once again maintained the strong uptrend with next target visible at Rs 820 levels and thereafter with strength sustaining can achieve the Rs 880 zone. The near term support is at Rs 760 zone."
Gaurav Bissa, Vice-President, InCred Equities said, "Tata Motors witnessed a 8-year breakout on the monthly charts around Rs 550-560 levels and has run up strongly since then. It has shown strong outperformance against its 4-wheeler peers. While the stock has potential to go higher, short term traders are advised to book profits. The long term targets are seen around Rs 900 levels where a cluster count target on point and figure charts is placed."
The Tata Group firm reported a net profit of Rs 3,764 crore in the September quarter against a loss of Rs 944.61 crore in the September 2022 quarter. Revenue climbed 32% to Rs 1.04 lakh crore in Q2 against Rs 78,846 crore in the corresponding period of the preceding fiscal. Operating margin in percentage terms rose to 13.19% in the September quarter against 7.67% in the September 2022 quarter.
EBITDA surged 86.4% to Rs 14,400 crore.
Earnings per share rose to Rs 9.81 in Q2 against (minus) Rs 2.47 in the September 2022 quarter. Debt to equity ratio fell to 2.23 in Q2 of this fiscal against 5.21 in the September 2022 quarter.
DISCLAIMER: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Also read: Buy Jio Financial shares; target Rs 290, says KRChoksey as it initiates coverage on stock
Also read: Top 5 stocks to watch on January 4, 2024: Adani Ports, Vedanta, Torrent Power and more