Tata Motors shares up 19% so far this year; can they scale past Rs 500 mark?

Shares of Tata Motors extended their gains in Thursday's trade for the second consecutive session. The stock rose 1.43 per cent to hit a day high of Rs 471.90 over its previous close of Rs 465.25. The counter has gained 18.91 per cent on a year-to-date (YTD) basis and 8.91 per cent in the past one year. At today's high price of Rs 471.90, the scrip traded 4.57 per cent lower from its 52-week high of Rs 494.50, a level seen on August 17, 2022. That said, it has gained 28.92 per cent from its one-year low of Rs 366.05, hit on May 12 last year.

Analysts largely remained mixed on the counter as one of them suggested that the stock could be seen facing resistance at Rs 480. Another analyst suggested a target price of Rs 530 while keeping a stop loss placed at Rs 425. Two more analysts recommended booking profits at current levels and waiting for a dip around Rs 436-440 to initiate fresh buys.

Arun Agarwal, Vice-President at Kotak Securities, said, "JLR's (Jaguar Land Rover's) Q4 FY23 reported wholesale volumes were better than our expectations, possibly supported by improvement in chip procurement. JLR's overall order book remains strong. In the standalone business, the company is expected to witness sequential revenue growth and EBITDA margin improvement in Q4 FY23E."

JLR is a wholly-owned subsidiary of Tata Motors. And, Tata Motors recorded a profit of Rs 506.19 crore in Q3 FY23 over Rs 175.85 crore in the same period a year ago.

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One, "On the back of strong global sales data, the stock has witnessed a strong move on the technical charts. Also, it saw a sloping trendline breakout and breached the previous swing high in a decisive manner, backed by volumes. As far as levels are concerned, the immediate support soared to the bullish gap of the Rs 450-440-odd zone. While on the flip side, Rs 480 is likely to be seen as immediate resistance in a comparable period."

Laxmikant Shukla, Technical Research Analyst at YES Securities, said, "The stock has been witnessing strong moves in the last two days. The stock recently saw some buying and emerged above the sloping trendline on the daily time frame, adding to the bullish sentiment. Primary indicators align with the trend and suggest a continuation of the movement in a comparable period. Hence, we recommend buying the stock with a stop loss of Rs 425 and a target of Rs 530."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "One should immediately book profits around the Rs 465-470 zone and wait for some correction till Rs 440 for fresh longs. As of now wait and watch."

AR Ramachandran from Tips2trades said, "Investors are advised to book profits at current levels and wait for a dip near Rs 436 to initiate fresh buy positions."

Yet, Tata Motors has an average target price of Rs 544.88, Trendlyne data showed, suggesting a potential upside of 15.94 per cent. The scrip has a one-year beta of 1.29, indicating high volatility.

Meanwhile, Indian equity benchmarks traded lower in afternoon deals today, halting their eight-day winning run as technology, pharma and energy stocks declined.

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