Tata Group-backed automobile giant, Tata Motors witnessed one of the best weekly performances in many weeks. From December 30th to January 3rd trading week, Tata Motors share price skyrocketed by 5.5% and even touched Rs 800 mark. The auto giant has been resisting its 52-week low level. The heavyweight stock gained despite commercial vehicle price hikes and muted December 2024 sales figures.
Tata Motors Share Price:
On January 3, Tata Motors' stock price ended at Rs 790.40 apiece, higher by 3.33% with a market cap of Rs 2,90,956.11 crore. The stock touched its Rs 800 mark by hitting an intraday high of Rs 800.50 apiece on Friday. This single-day strong rally led Tata Motors' weekly performance on a bullish note with gains of 5.46% on BSE.
The latest performance also pulled Tata Motors stock out of the bearish mark in 1 month's performance, as the stock is marginally up from December. Year-to-date, the stock has zoomed by 6.7% on BSE. However, the stock is currently down by 21% in its half-yearly performance.
Tata Motors' 52-week high and low are at Rs 1,179.05 apiece and Rs 718 apiece respectively. The company's price-to-equity ratio is at 31.07x, while the return on equity is at 30.57%.
Tata Motors Share BUY Or Sell?
Global brokerage CLSA has added Tata Motors to its portfolio. It said, "After over 35% decline, we believe Tata Motors is adequately building in risks of a slowdown in commercial vehicles as well as the Jaguar Land Rover (JLR) portfolio."
On the other hand, Incred Equities has suggested a 'Reduce' rating on Tata Motors after its subdued sales. While setting a target price of Rs 746, Incred's note said, "Supply challenges at JLR and demand weakness/ inventory challenges in the Indian market to impact the performance. Recent consensus EPS cut overlooked by rich P/BV valuation."
Earlier this week, Brokerage DAM Capital was the latest to upgrade on Tata Motors. The broker has given BUY from its previous rating of NEUTRAL with a target price of Rs 870 per share. It expects Jaguar Land Rover's (JLR) volumes to record a 6.5% CAGR over the financial year 2025-2027. Notably, it also expects mildly lower margins and lower valuation multiples for Tata Motors businesses like PV, CV and JLR. Also, Emkay Global has upgraded its rating on Tata Motors to BUY.
Furthermore, Tata Motors is expected to hit not only the Rs 1,000 mark but also reach near Rs 1,100 levels in 2025. Brokerage has set the highest target for 2025 at Rs 1,099.
Sharekhan's note said JLR has maintained its guidance of GBP30 bn of revenue, greater than or equal to 8.5% EBIT and net cash positive for FY2025. While hydrogen fuel cell technology is at a nascent stage, Tata Motors has been making efforts to secure its growth prospects in the hydrogen space in future. Adding it said, "We have a BUY rating on Tata Motors based on expectations of continued improvement in JLR, PV, and CV businesses as well as reduced net automotive debt."
Tata Motors December Sales:
The December 2024 sales of Tata Motors are subdued. In Q3FY25, the company recorded sales of 2,35,599 vehicles including both domestic and international markets, which was marginally up from sales of 2,34,981 units during Q3 FY 2023-24. The sales of commercial vehicles were down 1% YoY to 95,770 units, while passenger car sales inched up by 1% YoY to 1,39,829 units in Q3FY25.
In December 2024 alone, the company recorded sales of 76,599 units on the domestic front, which was up by 1% YoY. Domestic & International sales for MH&ICV in Dec 2024, was 16,604 units vs 17,591 units in Dec 2023; while in Q3 FY25 it stood at 46,108 units, vs 46,534 units in Q3 FY24.
Tata Motors Prices Hike:
From January 1, 2025, the company has hiked the prices of its trucks and buses portfolio by 2%. The portfolio is part of its commercial vehicle segment.
Tata Motors Demerger:
Additionally, a key development to watch out for is Tata Motors' split-up of business in a 1:2 ratio. The company is planning the demerger of Tata Motors into two separate listed companies housing A) the Commercial Vehicles business and its related investments in one entity and B) the Passenger Vehicles businesses including PV, EV, JLR, and its related investments in another entity.
The demerger ratio is 1:1, which means that shareholders of Tata Motors will have identical shares in both the listed companies.
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