This Tata Stock Is Riding High Defying Market Bears, Nears 52-Week High; To Buy 27% Stake In Logistic Firm

Auto giant, Tata Motors' share price is on the roll and riding to near sky-high levels. On Friday, this Tata stock was in its third-consecutive day rally and has been defying the market bears broadly in the current trading week. The stock is currently flirting near its 52-week high, and it looks like it will be a matter of time before it touches a new high. Tata Motors shares have been hitting new 1-year highs on multiple occasions this month.

On BSE, at the time of writing, the share price traded at Rs 671.65 apiece, up by 0.5% with a m-cap of Rs 2,22,977.31 crore. So far, in the day, the stock has gained by at least 1.2%.

The stock was already near its intraday high of Rs 676.55 apiece, and 52-week high of Rs 677.90 apiece.

Tata Motors has been in green since October 18th.

The latest reason for the upside is because of its acquisition plan of a digital platform that provides end-to-end logistics value chain solutions.

As per the regulatory filing, Tata Motors on Thursday signed a Securities Subscription Agreement (SSA) and a Shareholders Agreement (SHA) for the acquisition of a 26.79% stake in 'Freight Tiger' for a consideration of Rs 150 crore. Not just that, Tata Motors further plans to invest Rs 100 crore over the next two years, at the then prevailing market value.

'Freight Tiger' is a digital platform that provides end-to-end logistics value chain solutions for cargo movement
in the country. The platform connects shippers, carriers, logistics service providers and fleet owners to a single
digital marketplace, making it easy to find, book and manage freight whilst offering a variety of Software as a
Service (SaaS) solutions to digitize and streamline logistics interactions such as freight tracking, assignment, carrier matching, documentation, and payment processing.

Also, the platform facilitates more than 10 million trips on an annualised basis and has been successfully integrating and ironing out inefficiencies in cargo movements over the last 7 years.

Recently, Tata Motors introduced its connected vehicle platform 'Fleet Edge' for aiding fleet operations management. Tata Motors' strategic investment in 'Freight Tiger' will accelerate the company's initiatives in driving effectiveness and efficiency in the truck and freight ecosystem.

Together, these innovative solutions ('Fleet Edge' & 'Freight Tiger') aspire to forge a comprehensive end-to-end digital ecosystem for the entire logistics value chain, covering both the truck and the trip ecosystem thereby bringing significant benefits to shippers, brokers and transporters who keep India moving, it said.

In a month, Tata Motors shares are up 5% on BSE, but in six months, the stock has rallied by 40.50% as of now.

Earlier, investors' spirit was high in Tata Motors due to a stake sale of 9.9% in the IPO-bound Tata Technologies to TPG Rise Climate SF Pte. Ltd, a climate-focused private equity fund, and Ratan Tata Endowment Foundation, a section 8 company. The transaction is worth Rs 1,613.7 crore.

Going ahead, Tata Motors will be in focus for its September 2023 quarterly earnings. Also, on Thursday, Tata Motors informed that the Board of Directors is scheduled to meet on November 2, 2023, to consider and approve the Audited Standalone Financial Results and Unaudited
Consolidated Financial Results (with Limited Review) for the second quarter and half year ended September 30, 2023.

In Q2FY24, as per Motilal Oswal, Tata Motors' India business performance was a mixed bag as CV volumes grew 3.5% YoY while PV volumes fell 3% YoY. However, the brokerage also added that led by lower RM costs, cost-control measures and operating leverage (in CVs), Tata Motors EBIT margins for CV/PV are likely to expand 180bp/80bp YoY in 2QFY24.

For its luxury brand Jaguar Land Rover (JLR), in Q2FY24, Motilal's note said, "JLR volumes to grow YoY due to easing chip shortage situation and continued traction in new models. We estimate an EBIT margin of 7% for JLR in 2QFY24 (vs. 1% in 2QFY23), supported by mix, softening RM costs and cost control measures."

Accordingly, Motilal Oswal has given 'Buy' on Tata Motors for a target price of Rs 740.

Disclaimer:

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