The majority of Tata Group stocks are bustling with bulls after their Q3FY24 results. Brokerages are optimistic and in the latest time, there are five Tata stocks that are hot bets either to buy or accumulate. These stocks are Tata Motors, Tata Consumer Products, Trent, Indian Hotels, and Titan Company. These stocks have the potential of up to 21% upside in the near term. Brokerages such as Motilal Oswal, JM Financial, and Centrum among others.
In its brokerage note, JM Financial said, "In 3QFY24, JLR reported EBITDAM of 16.2% was +70bps above JMFe. 130bps sequential margin improvement was led by favourable mix and higher operating leverage. India business (CV+PV) EBITDAM stood at 9.8%, 80bps above JMFe. Supply normalization aided JLR in reducing its order backlog to c.148k units. While the US market continues to be strong, the demand environment in EU remain stable. Management indicated higher marketing spends going forward to drive JLR's order book. Focus is on achieving 10% EBIT margin by FY26 (vs. 8%+ in FY24) through better mix and higher operating leverage. Strong FCF generation is expected to support investments towards electrification at JLR and the company is on track to reduce net debt to
JM's note added, "TTMT's EV portfolio is leading the domestic EV space. CV demand is expected to remain muted in the near-term. However, improving margins for both domestic CV and PV segments augurs well for overall profitability. Domestic business is also on track to turn net debt free. Maintain BUY with Mar'25 SOTP of Rs 1,000 (standalone / JLR valued at 10x /2.5x EV/EBIDTA). Slowdown in key global markets remains a monitorable."
Motilal Oswal in its note said, "TATACONS's holistic strategy is aimed at: i) strengthening and accelerating its core business, ii) exploring new opportunities, iii) unlocking synergies, iv) digitizing the supply chain, v) expanding its product portfolio and innovation, vi) enhancing its focus on premiumization and health & wellness products, vii) embedding sustainability, and viii) expanding its sales and distribution infrastructure, supply chain, and capability building toward being a multicategory FMCG player."
It added, "We expect a CAGR of 12%/18%/23% in revenue/EBITDA/PAT over FY23-26. Factoring in 3QFY24 performance, we raise out FY24 EBITDA estimate by 5%, while we maintain our FY25/FY26 EPS estimates. Reiterate BUY with a SoTPbased TP of INR1,370."
Centrum in its note said, "We remain upbeat on Titan's operating performance led by strong demand across business segments yet its footing in international market appears to be promising. We reckon Titan's strategy revolving around serving millennials, meeting their aspirational demand with introduction of new designs and channels, yet rising share of wedding jewelry could pay richly. Further with rising interest rates and industry formalization showing up in market share gains for Titan. The turnaround in the Caratlane, watches, and eyewear divisions and continuity in their profitability potential need to be watched."
It added, "With stable margin outlook we increased FY24E/FY25E earnings by 1.0%/9.9%. We retain BUY, with a revised DCF-based TP Rs4,255 (implying 65.6x avg. FY25E/FY26E EPS). Risks: irrational competition from regional players; prolonged recovery in the economy, leading to lower demand for jewelry and rising gold prices."
Motilal Oswal also recommended buying for a target price of Rs 4,200.
Motilal has suggested buying Indian Hotels for a target price of Rs 615.
Meanwhile, IDBI Capital in its said, "We believe the company is poised for robust earnings trajectory over next couple of years supported by many growth levers. Net sales increased by 16.5% YoY to Rs19.6bn, while EBITDA came in at Rs7.3bn, a healthy growth of 22.6% YoY. Net profit stood at Rs4.7bn, higher by 18.2% YoY. We remain positive on domestic hotels segment and continue to like IHCL amongst the listed players. We roll over to FY26E and maintain BUY with a revised TP of Rs586 (earlier Rs445), assigning 26x EV/EBITDA to FY26E."
In its brokerage note, JM Financial said, "We note in a challenging environment across categories Trent saw strong demand momentum indicating, (1) successful marketing strategy driving value-for-money customers, (2) sharp price points leading to customer traffic, (3) right store matrix. Further continued store expansion and earning beat we have increased FY24E/FY25E earnings by 21.0%/34.7%. Though we are optimistic on Trent's growth story, given stretched valuation we downgrade to ADD rating with a revised SOTP-based TP of Rs4,198 (implying PE of 91.1x Sept'26 earnings). Risk Increase in competitive intensity, weakening of demand environment."
Motilal Oswal has recommended to buy for a target price of Rs 4,200.
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.
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