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KR Choksey Positive On Tata Group Stock, Sees Shares Soaring, Recommends Buy
Shares of Tata Group Stock, Tata Motors Ltd is likely to witness a surge post Budget 2023 announcement on electric vehicles. According to report, Finance Minister Nirmala Sitharaman announced that the subsidies on Electric Vehicle batteries will be extended for 1 more year, thus making electric vehicles economical in India.
The move is expected to benefit Tata Motors. Meanwhile, brokerage firm KR Choksey, has given buy call with a target price of Rs 572 apiece and a potential return of 29% soon. Check details below:
1. Tata Motors Stock Performance & Return
The last trading price of Tata Motors is Rs 442.85 apiece with an intraday fall of 0.71%. The stock's 52-week high is Rs 514.40 apiece and 52-week low is Rs 366.05 apiece, respectively.
The large cap company has a market capitalisation of Rs 1,47,367.02 crore. The stock offered 8% return in last 3-months, negative return of 6% in last 6-months, and again negative return of 9% in last 1-year.
The stock rallied 175% in last 3-years and 15% in last 5-years.
2. Outlook
All three auto verticals- JLR, TML-CV, and TML-PV improved on profitability metrics in Q3FY23. Management expects to sustain the improvement in margins and FCF generation in the coming quarters. Management expects chip supply to improve further leading to volume ramp-up, especially for JLR.
Commodity costs are expected to be stable from here, which along with focus on profitable growth should aid EBIT and free cash flows.
3. Valuation
According to the analyst, "We expect the company will grow at CAGR of 15.7%/ 29.1% in revenues/EBITDA over FY22-25E. We change our valuation methodology to SOTP valuation. We value the JLR & Chery-JLR JV businesses at 2.5x EV/EBITDA, TML-CV at 13.0x EV/EBITDA, and TML-PV business at 14.8x EV/EBITDA and arrive at a target price of INR 572 per share (unchanged), implying an upside of 28.9%. Accordingly, we maintain our "BUY" rating on the shares of Tata Motors."
4. About Tata Motors
Tata Motors Group (Tata Motors) is a $37 billion organisation. It is a leading global automobile manufacturing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks, buses and defence vehicles. Tata Motors is one of India's largest OEMs offering an extensive range of integrated, smart and e-mobility solutions, according to its official website.
Disclaimer
The stock has been picked from the brokerage report of KR Choksey. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.
