Tata Motors Share: Biggest Winner Of 2023, Starts New Year With A Bang; Trades Above Brokerages TPs, BUY MORE?

Tata Group-backed automobile flagship company, Tata Motors emerged among the biggest gainer on the New Year's Day, January 1, 2024, on BSE and NSE. This auto giant was the most bought stock in the large-cap basket on these exchanges in 2023. It not only climbed the ladder to become part of Nifty 50 stocks, but it also doubled and gave multi-bagging returns. Currently, the stock trades above brokerages' target prices, and the consensus analysts recommend buying. Stock traders and experts on X handle eyes target prices in the range of Rs 850 to Rs 1000 for Tata Motors.

In January, Tata Motors' share price will be in focus due to its monthly sales, price hikes, and upcoming Q3 earnings.

On BSE, the auto player's stock price ended at Rs 790.50 apiece, up by 1.3% on January 1, 2024. The stock was near its 52-week high level. Currently, the company's market cap is over Rs 2.62 lakh crore.

Tata Motors has increased prices of its commercial vehicles by up to 3% has come into effect from January 1, 2024.

Tata Motors December, Q3FY24 sales:

What makes Tata Motors special is the potential to be a leader of the pack in the electric vehicles segment. The company has been shifting its sales from passenger cars to EVs in line with the government's electric vehicles adoption target.

The company has announced its December 2023 sales figures alongside Q3FY24 numbers as well. Broadly, the sales were healthy in segments like CVs, and PVs, however, sales of EVs outperformed.

As per the statement, the company's sales in the domestic & international market for Q3 FY 2023-24 stood at 234,981 vehicles, compared to 228,169 units during Q3 FY 2022-23. Of the total, domestic sales were at 229,610 units, up by 3% YoY. In December alone, domestic sales jumped by 4% YoY to 76,138 units.

In terms of segment, total commercial vehicles surged by 1% YoY to 96,526 units in Q3FY24, while also up by 1% YoY to sales of 34,180 units in December 2023. Domestic sales of MH&ICV in Dec 2023, was 16,851 units vs 15,244 units in Dec 2022; In Q3 FY24 it was 44,365 units, compared to 40,391 units in Q3 FY23. Also, Domestic and international sales for MH&ICV in Dec 2023 was 17,591 units vs 15,756 units in Dec 2022; while in Q3 FY24 it stood at 46,534 units vs 42,369 units in Q3 FY23.

Meanwhile, total passenger vehicles (including EVs) sales jumped by 5% YoY to 138,455 units in Q3FY24, while in December 2023, sales were up by 8% YoY to 43,675 vehicles. Electric vehicle sales alone climbed a whopping 21% YoY to 15,232 units during Q3FY24, while the sales were up by 29% YoY to 5,006 units in December 2023.

Tata Motors Outlook:

Girish Wagh, Executive Director, Tata Motors said that the YoY growth trend witnessed during past quarters paused in Q3FY24 on account of the higher base effect, the impact of elections held across 5 states, and the post-festive seasonal slowdown in rural consumption. He added, "Going forward, we expect demand to improve in Q4FY24 across most segments of the CV industry due to the Government's continuing thrust on infrastructure development, the promising growth outlook of the economy and our demand-pull initiatives."

In the case of PVs, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility said that the PV industry is expected to post its highest-ever sales in the calendar year 2023 (CY23), crossing the significant 4 million mark, supported by a strong supply situation, new nameplates launched in the SUV segment, and a robust demand during the longer festive period.

Chandra added, "Both EV and CNG segments posted growth greater than 90% and 25% respectively, signalling a growing preference for green and smart technologies by Indian customers."

Further, in 2024, Chandra added, "Going forward, with multiple new products, including a new nameplate scheduled for launch in CY2024, we remain optimistic about continuing the growth trend in the quarters ahead."

The Indian government is aiming at achieving EV adoption to reach 40% for buses, 30% for private cars, 70% for commercial vehicles and 80% for two-wheelers by 2030. Tata Motors is already sitting on massive deals for electric vehicle buses from the government. Also, Tata Motors is embarking on a $2 billion investment in its EVs. It will be keenly watched to see whether Tata Motors flourishes to become the Tesla of India.

Tata Motors Share Price Target:

At present, Tata Motors is trading above the target prices of brokerages like KR Choksey (TP of Rs 784); Motilal Oswal (TP Of Rs 750); AUM Capital (TP Of Rs 760); and JM Financial (TP Of Rs 730) among others.

Recently, stock traders and experts have been predicting the next target prices of Tata Motors after a robust rally in 2023. The expectation is between Rs 850 to Rs 1000.

Also, as per Trendlyne, the consensus recommendation from 33 analysts for Tata Motors is BUY. Of these, 24 analysts have recommended 'STRONG BUY', while 4 analysts have said 'BUY' and 3 of them have suggested 'HOLD'. While 1 analyst each has recommended selling and strong selling. Nevertheless, the data also said that EPS is expected to grow by 1422.3% in FY24

Some of the key parameters for lifting Tata Motors' share price as per Trendlyne are:

- Stock Price rose 103.79% and outperformed its sector by 46.68% in the past year.

- Mutual Fund Holding increased by 1.13% in the last quarter to 9.82.

- Price to Earning Ratio is 17.13, lower than its sector PE ratio of 37.

- Interest Coverage Ratio is 3.57, higher than 1.5. This means that it can meet its interest payments comfortably with its earnings (EBIT).

- Promoter Pledges stayed the same in the last quarter at 1.82%.

- Annual Net Profit rose 121% in the last year to Rs 2,414.29 Crores. Its sector's average net profit growth for the last fiscal year was 94.54%.

- Annual Revenue rose 24.54%, in the last year to Rs 350,600.15 Crores. Its sector's average revenue growth for the last fiscal year was 26.01%.

Additionally, the stock's weekly average delivery volume is 33.12%, while it is trading above 8 out of 8 SMAs, and above 6 out of 9 Oscillators in bullish zone. Moreover, Tata Motors share is trading above its Pivot 790.12. However, the RSI and MFI of the stock is at 77.2 and 79.6, which is considered overbought.

Moreover, Antique Stock Broking in its latest research note said, "TTMT's CNG models are being accepted well in the market; we expect the CNG market to expand with the addition of new models. Tata Motors EV segment demand seems to have peaked out now and dealers expect volumes to be stable going ahead as well."

Overall, Antique's analyst said, "We expect PV volumes to be moderate on YoY basis inquires for new nexon are improving and dealers are positive about demand going ahead. EV demand is stable currently."

Tata Motors powerpack performance in 2023:

On the last trading day of 2023 (December 29), Tata Motors stock struck a new 52-week high of Rs 802.90 apiece. The stock ended the year 2023 at Rs 779.95 apiece.

A year ago, on January 2, 2023, Tata Motors' share price was around Rs 394.80 apiece on BSE. From this level, the stock skyrocketed by more than 103% in 2023. Tata Motors wasn't just star performer of Tata Group in 2023, it also made many investors rich.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor 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.