Tata Motors shares snap six-day gaining streak; can they still touch Rs 750 mark?

Shares of Tata Motors Ltd snapped their six-day gaining streak on Thursday even as the auto sector major hit a fresh 52-week high in the same session. Tata Motors stock ended 1.46% lower at Rs 559.65 against the close of Rs 567.95 in the previous session. Tata Motors stock opened higher at Rs 569.65 and hit fresh 52 week high of Rs 576.5 on Thursday.

Market cap of the firm fell to Rs 1.85 lakh crore. Total 15.68 lakh shares changed hands amounting to a turnover of Rs 88.73 crore on BSE. Tata Motors stock has gained 28.48% in a year and risen 44.2 per cent in 2023. Tata Motors stock hit a 52-week low of Rs 375.50 on December 26, 2022.

In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 71.3, signaling it's trading neither in the overbought nor in the oversold zone. Tata Motors stock has a one-year beta of 1.2, indicating high volatility during the period. Tata Motors shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

ICICI Direct has maintained its Buy call on the stock tracking profitability at the helm in domestic CV & PV business (including EVs), JLR's progressive volume recovery on the anvil, reiterated commitment towards EVs & healthy FCF generation.

On the target price and valuation, the brokerage said, "Retaining our financial estimates & marginally tweaking our valuations, we now value Tata Motors at Rs 725 on SOTP basis (10x, 2x FY25E EV/EBITDA on India, JLR; Rs 126 value to Indian EV business; earlier TP Rs 650)."

V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today said, “This stock is in a bullish momentum and trying to hit its all-time high. Those who have already bought it, they can hold it for more gains. Upcoming targets are Rs 570/600/610/630/650/670/700/750 (3 months to 1 year of time). For any fresh buying, one should wait a little as price has already touched its 2nd target and now a pull-back is expected. Now , Rs 450 level is a strong support range (so stop loss should be below this ideally Rs 435) and a pullback is expected in the range of Rs 500-530. RSI also showing the same over bought zone. However, volumes are still rising on bourses. So buy on dip strategy will be the best in the coming days.”

On May 26, Moody's Investors Service said it has upgraded its rating outlook on Tata Motors to positive from stable. Moody's has also affirmed the company's B1 corporate family rating (CFR) and its B1 senior unsecured ratings.

“The rating affirmation and outlook change to positive reflect our expectation that the substantial improvement in Tata Motor's credit profile over the past few quarters will sustain over the next 12-18 months," said Moody's Senior Vice President Kaustubh Chaubal.

On May 12 this year, the company reported a consolidated net profit of Rs 5,408 crore in Q4 compared with a loss of Rs 1,033 crore in the year-ago period. On a sequential basis, Tata Motors reported a second consecutive quarterly profit, helped by price hikes and strong demand for cars in its luxury Jaguar Land Rover (JLR) stable as well as for commercial trucks.

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