Tata Motors shares hit fresh one-year high; SBI Securities sees stock at Rs 1,060

Tata Motors shares climbed 3.02 per cent in Tuesday's trade to scale their fresh one-year high of Rs 965. At this price, the multibagger stock has rallied 141.01 per cent from its 52-week low of Rs 400.40, a level seen on March 28 last year.

SBI Securities, in its recent report, mentioned that the carmaker's consolidated sales, EBITDA and PAT grew 25 per cent, 42 per cent and 140 per cent (year-on-year) to Rs 1,10,577 crore, Rs 15,418 crore and Rs 7,145 crore respectively. EBITDA margin improved around 200 basis points (bps) YoY to 14 per cent.

The brokerage said Tata Motors' net automotive debt reduced by Rs 9,500 crore, sequentially, to Rs 20,700 crore. "JLR posted strong revenue growth of 22 per cent YoY with 410 bps EBITDA margin improvement. The revenue growth was led by 27 per cent YoY volume growth in wholesales. Retail sales too were up 29 per cent YoY. Ramp up in production is helping to reduce the order backlog. JLR raised its EBIT margin target for FY24E to above 8 per cent," it stated.

"The Q3 FY24 results were above estimates. The company raised the EBIT margin guidance for JLR in FY24 to above 8 per cent while also guiding for sustaining double digit EBITDA margin in the CV business. The launch of the refurbished Nexon ICE version and Nexon EV as well as the new Punch EV is expected to drive volumes in Q4 FY24. Additionally, the company has lined up multiple launches in CY 2024 across both JLR and the domestic PV business," SBI Securities further said.

We expect the stock to touch Rs 1,060 – 1,080 in the medium term, the brokerage added.

On technical setup, Tata Motors traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 74.83. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 36.74 against a price-to-book (P/B) value of 13.45. Earnings per share (EPS) came at 25.49 with a return on equity (RoE) of 36.61.

The counter saw high trading volume today as around 5.52 lakh shares changed hands on BSE. The figure was higher than the two-week average volume of 3.98 lakh shares. Turnover on the stock came at Rs 52.63 crore, commanding a market capitalisation (m-cap) of Rs 3,19,946.05 crore.

(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 a qualified financial advisor before making any investment decisions.)

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