2 Tata Stocks At Peak Levels, Hit Back-To-Back Fresh 52-Week Highs; 35%-125% Returns YTD; Buy Still?

Two Tata Group-backed stocks namely in the automobile and gems & jewellery segments have hit back-to-back fresh 52-week highs. Wednesday was no different! Tata Motors crossed the Rs 700 mark to touch yet another new 1-year high, while Titan did the same. Both Tata stocks are currently at record-high levels. And among public shareholders the Jhunjhunwala family is the biggest winner.

On Wednesday, Tata Motors' share price touched a new 52-week high of Rs 702.90 apiece, while Titan Company's share price touched a new all-time high of Rs 3,470 apiece.

Both stocks have touched new 52-week highs on numerous occasions especially after as investors chirped happily for Tata Technologies IPO since its launch on November 22. Many Tata stocks saw bullish sentiment that's because Tata Tech would be the Group's first public offer since TCS IPO in August 2004.

Tata Motors monthly gains is nearly 13% as of now, while Titan shares zoomed by nearly 11%. Year-to-date, riding on the back of bulls, Tata Motors emerged as multibagger with an upside of over 124% and Titan soared by 34.4% so far.

Tata Motors announced that it has approved the transfer of over 6.08 crore equity shares to the investors of Tata Technologies IPO at the issue price of Rs 500. The company's shareholding drops from 64.79% to 53.39%.

Meanwhile, Titan in its latest development said that the company has completed the acquisition of 91,90,327 equity shares of CaratLane from the founder of CaratLane and his family members. Its shareholding in CaratLane increased from 71.09% to 98.28% on a fully diluted basis.

Notably, late market mogul Rakesh Jhunjhunwala whose portfolio is now being held by his wife Rekha is among the biggest gainers due to the stellar performances of these two Tata stocks.

As of September 30, 2023, Rekha holds 47,695,970 equity shares or 5.4% stake in Titan, and 53,256,000 equity shares or 1.6% in Tata Motors. As per Trendlyne data, her shareholding is valued at nearly Rs 16,420 crore and Rs 3,715 crore in Titan and Tata Motors, making the two stocks her largest shareholding in value terms.

Should you buy or book profits in these two stocks?

Titan Share Price:

Manish Chowdhury, Head of Research, StoxBox said, "The company has consistently delivered superior financial performance aided by the company's strong brand recall, growing franchise across geographies, good product mix and favourable industry tailwinds. We expect the company's performance to improve further as the share of the studded business improves in the overall jewellery segment, omnichannel strategy across jewellery, eyewear and watches bear fruits and sub-brands such as Mia, Zoya and Caratlane gain further acceptance."

Chowdhury further added, "To address the challenge arising from a large base, we believe that the company has taken steps to further tap into the growing discretionary spending in India by diversifying into emerging businesses such as fragrances, fashion accessories, handbags, dress materials, etc. which bodes well for future growth."

Motilal Oswal has a buy recommendation on Titan shares for a target price of Rs 3,900.

JM Financial has set a target price of Rs 3,705 with a Buy recommendation.

Tata Motors Share Price:

For Tata Motors, both Motilal Oswal and JM Financial have suggested buying. Motilal's target price is Rs 750, while JM's price target is Rs 730 in 12 months.

Post Q2 results, Prabhudas Lilladher in its note said, "We maintain our positive stance on TTMT given (1) JLR's volume ramp-up resulting in strong revenue, profitability and FCF, 2) Domestic CV benefitting from underlying economic strength, operating leverage, benign input costs and lower discounts and (3) focus on market share in PV segment (13.4% in 1HFY24 vs 8% in FY21) led by model launches and rising EV penetration. Retain 'BUY' with SoTP-based TP of Rs 785 (earlier Rs 760)."

Furthermore, KR Choksey in its latest note said, "Looking ahead, JLR production and wholesale volumes are expected to gradually increase in H2FY24E. The EBIT margin for FY24E is now expected to improve to around 8.0% compared to the previous guidance of 6.0% JLR FCF guidance for FY24E is maintained at over GBP 2 Bn with net debt reducing to less than GBP 1 Bn. TML-CV plans to continue delivering double-digit EBITDA margins backed by improving mix, demand-pull strategy and new business models like Smart Mobility Solutions, digital offerings, and non-vehicular Business. Volumes and margins for TML-PV will improve in H2FY24E due to the new-generation product launches. The EV EBITDA margins will see further improvements in Q3FY24E and Q4FY24E due to the lowering of battery prices and new contracts coming in place."

KR's note added, "TTMT is looking at a strong H2FY24E and beyond due to improvements in all 3 business verticals. JLR will see higher volumes, and an improved product mix leading to a higher EBIT margin guidance for FY24E. TML-CV will continue to see double-digit EBITDA margins backed by strong realizations. The TML-PV margins are likely to improve due to new product launches done recently and improvements in EV margins. With all 3 businesses firing in the right direction, TTMT is well-poised to deliver a solid performance going
ahead."

Hence, KR set a target price of Rs 784 with a Buy call on Tata Motors.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.