1:2 Split Soon, 3,052% Returns: Tata's Auto Stock To Buy Before Q4; Company Signs Big Deal Ahead Of Splitting

Tata Group's 79-year-old automobile giant, Tata Motors will be in focus on Tuesday after signing a Memorandum of Understanding (MoU) with South Indian Bank to offer convenient financing solutions to its commercial vehicle customers and dealerships. As the May month nears, Tata Motors is going to be in focus for its Q4 results and dividend recommendations as well. So far, Tata Motors has resisted around the Rs 1,000 mark.

But before Q4, Tata Motors has a short-term target of Rs 1028.48, Rs 1,075, and Rs 1,085. It will be keenly watched if the big fuel is from Q4 results.

On NSE, Tata Motors' share price stood at Rs 1,000.05 apiece, marginally up on Monday with a market cap of Rs 3,32,390.52 crore. The stock's 52-week high and low is at Rs 1,065.60 apiece and Rs 474.55 apiece.

YTD, Tata Motors share price gained by 26.5%, while in a year, the stock zoomed by 108%, and 5-year gains is about 377.5%. Meanwhile, Tata Motors all-time gains is a whopping 3,051.75%. The stock price was just at Rs 31.73 apiece on January 1, 1999.

In its latest development, Tata Motors announced that it has signed a Memorandum of Understanding (MoU) with South Indian Bank to offer convenient financing solutions to its commercial vehicle customers and dealerships. South Indian Bank will offer financing across the entire commercial vehicle portfolio, and customers will benefit from the bank's wide network and specially curated easy repayment plans.

The partnership represents a significant stride towards providing enhanced support to dealerships, fostering growth, minimising collateral requirements, lowering the rate of interest and streamlining credit processing.

P R Seshadri, MD & CEO, South Indian Bank, "At South Indian Bank, we are dedicated to fostering a secure, agile, and dynamic banking environment tailored to the needs of fleet owners and dealerships. Our collaboration with Tata Motors enables us to deliver seamless vehicle financing solutions to commercial vehicle dealers and customers. We are confident that our partnership with Tata Motors will result in best-in-class financing solutions, setting a new industry benchmark for excellence."

Meanwhile, Rajesh Kaul, Vice President & Business Head - Trucks, Tata Motors Commercial Vehicles, said, "We are delighted to announce our partnership with the reputed South Indian Bank, which understands the needs of our customers. For our customers, easy access to financing solutions for their commercial vehicles is one of the key priorities for their operations. Our alliance aims to empower fleet owners and dealerships to achieve their business goals. We look forward to providing greater convenience and support to our valued customers and partners."

Tata Motors offers an extensive range of sub-1-tonne to 55-tonne cargo vehicles and 10-seater to 51-seater mass mobility solutions, ranging in small commercial vehicles and pickups, trucks and buses segments to address the evolving needs of logistics and mass mobility segments. The company ensures unparalleled quality and service commitment through its extensive network of 2500+ touchpoints, manned by trained specialists and backed by easy access to Tata Genuine Parts.

Tata Motors Target Price:

As per Trendlyne data, the consensus recommendation is based on 29 analyst recommendations. Currently, its consensus recommends a hold. Of the total 12 analysts have suggested a strong buy in Tata Motors shares, while 9 have recommended just BUY, and 4 analysts advise holding the shares. The rest suggest sell and strong sell.

Trendlyne's data said that Tata Motors Ltd. (75) has the second-highest Durability score amongst its peers, behind Force Motors Ltd. (95) and tied with Maruti Suzuki India Ltd. and 2 others.

The average estimate is that Tata Motors EPS is expected to grow by 1673.5% in FY24, while its net income is expected to grow by 741.0% in FY24.

Accordingly, the average 1-year target is at Rs 1028.48 apiece, which indicates up to 3% upside ahead in the near term. Meanwhile, brokerages like Prabhudas Lilladher and ICICI Direct have recommended Accumulate and BUY for the short-term target of Rs 1,075 and Rs 1,085 apiece.

Prabhudas and ICICI's target will be the new high!

Tata Motors is set to split in the ratio of 1:2.

Tata Motors board has approved the demerger of the company 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.

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.