Why Tata Motors share price rose over 10% in trade today

The Tata Motors share price rose in early trade today after investment advisory firm Macquarie assigned outperform rating to the stock. Tata Motors' UK arm Jaguar Land Rover posted its best February sales ever in the US, which also helped the stock in trade today. Tata Motors share price rose 8.75% to 198 compared to the previous close of 180.10 on BSE. Tata Motors share opened at 183.95 level and hit an intra day low of 181.50 on BSE. Tata Motors share price has risen 13% since the beginning of this year and lost 44% during the last one year.Tata Motors share was the top gainer on Sensex Nifty today. On Nifty, the stock rose 10.01% to 198.35 level in trade today.

Tata Motors share has gained 10.24% during the last three days. Tata Motors share turnover rose to Rs 50.02 crore with 26.24 lakh shares changing hands on BSE.

16 of 38 brokerages rate Tata Motors "buy" or 'outperform', 18 "hold" and three "underperform" and one "sell", according to analysts' recommendations tracked by Reuters. The Tata Motors share price is trading below its 50-day and 200 day moving average of 173 and 195  respectively.

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Macquarie has given a target price of Rs 260 on the Tata  Motors stock citing an increase in average incentives due to a rise in incentives on jaguar models. The brokerage expects JLR's cost reduction plans to yield positive results in 2019. The upgrade in the stock price comes amid falling sales for the Indian auto behemoth.

In the US, Jaguar Land Rover total February sales reached 11,616 units, a 29 percent increase from 9,013 units in February 2018. Jaguar sales zoomed to 3,465 units, a 59 percent increase from 2,185 units in February 2018.

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Sales for Land Rover brand were the best ever, up 19 percent for the year.

Land Rover clocked its best ever February sales with 8,151 units, an increase of 19 percent from 6,828 in February 2018.

Meanwhile, at home, Tata Motors reported a three percent decline in domestic sales to 57,221 units in February 2019 as compared with 58,993 units in the same month last year. The company's passenger vehicle sales in the domestic market increased two per cent to 18,110 units last month, compared with 17,771 units in the year-ago period. The company said its commercial vehicle (CV) sales in the domestic market stood at 39,111 units in February, down five per cent from 41,222 units in the same month of 2018.

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On the other hand, Nomura has given a neutral rating to the stock with a target price of Rs 187.  The brokerage has factored in 12% decline in global wholesales for JLR in February and 10% decline in overall JLR volumes in FY 19. It said ramp-up for I-Pace, launch of new Evoque can help volumes in FY20. However, the brokerage does not expect re-rating for the stock, given tough market conditions in China.

Meanwhile, the firm has denied any plan to sell stake in its ailing UK arm Jaguar Land Rover. "There is no truth to the rumours that Tata Motors is looking to divest its stake in JLR and we would not like to comment further on any market speculation," the firm said in a filing.

"There is no truth to the rumours that Tata Motors is looking to divest its stake in JLR and we would not like to comment further on any market speculation."

Edited by Aseem Thapliyal