A total of 13 Tata group stocks including Trent Ltd, The Indian Hotels Company Ltd, Nelco Ltd and Voltas Ltd beat the Sensex return by a wide margin in 2024 so far. On the other hand, shares such as Tata Technologies Ltd, Tata Elxsi Ltd, Tata Consumer Products Ltd, Tata Teleservices (Maharashtra) Ltd and Titan Company Ltd disappointed investors of the salt-to-software conglomerate, delivering negative returns during the same period.
The year saw the demise of legendary industrialist Ratan Tata after 50 years of fruitful career at the Tata group. Data compiled from corporate database showed 23 listed Tata group companies commanded a m-cap of Rs 32,40,883 crore as on December 17, which at a record low rupee-dollar value of 84.92 stood at $381 billion. At this exchange rate, the m-cap of listed Tata group entities stood at Rs 27,88,025 crore or $328 billion at the end of 2023.
Trent Ltd soared 127.21 per cent while IHCL delivered 100 per cent return in 2024. Goldman Sachs in a note last month said Trent is one of the strongest growth stories in India consumer, with the key driver being market share gains in India’s value fashion market, through its brand Zudio. It expects a 28 per cent revenue CAGR for Trent over FY24-30. As the growth is market share gain driven, it expects a limited impact on Trent from the urban slowdown.
MOFSL on Tuesday suggested a 'buy' rating on IHCL with a target of Rs 950. The IHCL management recently unveiled its execution strategy and goals for 2030. The management said while Indian Hotels achieved over FY17-24 was ‘aspirational’ whereas journey going ahead should be an ‘acceleration’ and building on that base by managing the cyclicality well.
"While 2 times revenue target over FY24-30 might sound unattractive, any potential M&A activity could lead to further upside in our view. Also, we believe that most importantly 20 per cent ROIC target (15 per cent in FY24) by FY30 is the key differentiator to justify the premium valuation," Nirmal Bang said.
Nirmal Bang maintained its 'Buy' with a revised target price of Rs 860 against Rs 790 earlier.
Nelco Ltd, Voltas Ltd and TRF Ltd were three Tata group stocks that gained 77-81 per cent in 2024. Nelco and TRF are not tracked by many brokerages. ICICI Securities said Voltbek, which is still in an investment mode, is likely to be value accretive for Voltas from FY25It expects Voltas will be able to add 5 per cent additional value to Voltas in FY27 and beyond.
"We model Voltas to report revenue and PAT CAGRs of 20.8 per cent and 71.7 per cent, respectively, over FY24–27E. Maintain HOLD with DCF-based revised target price of R 1,700 (earlier: Rs1,645), it said on December 10.
Stocks such as Automotive Stampings and Assemblies Ltd, Tata Investment Corporation Ltd and Automobile Corporation of Goa Ltd delivered over 50 per cent returns.
Tejas Networks Ltd (up 49 per cent), Tata Power Company Ltd (26.66 per cent), Rallis India Ltd (20 per cent), Tata Consultancy Services Ltd (14 per cent), Tata Steel Ltd (4 per cent) and Tata Communications Ltd (2 per cent) delivered positive returns.
On Tata Power, Sharekhan said the Tata group company has a well-planned strategy to shift towards clean energy and targets for 2.5 times rise in PAT by FY2030E over FY2024. It maintained a 'Buy' on Tata Power with an unchanged target of Rs 540 apiece.
On Tata Steel and other steel stocks, Nuvama said: "As we are entering a seasonally good quarter, not to mention expectation of a stimulus in China, stock prices have already factored in an improvement in earnings. This is a chance to book profits, particularly in JSW Steel, SAIL and Tata Steel. JSPL remains our preferred pick."
Tata Technologies Ltd plunged 21 per cent and was the worst Tata group stock. Tata Teleservices (Maharashtra) Ltd, Tata Consumer Products Ltd and Tata Elxsi Ltd fell 12 per cent, 16 per cent and 17 per cent, respectively. Tata Motors Ltd, Tata Chemicals Ltd, Benares Hotels Ltd and Titan Company Ltd fell up to 7 per cent.
In a technical note, JM Financial said: " Tata Motors has a strong price seasonality in the month of January. In the last 10 years, the stock has closed in the green on 7 occasions with an average return of 8.3 per cent," it said.
A couple of brokerages, meanwhile, cut their target prices for Titan last month as the management lowered its margin guidance for FY25 by 100 basis points. Analysts said the impact of custom duty cut while benefited the jewellery growth, weighed negatively on reported margins, with adjusted also weak due to inferior product mix (lower studded).