Tata Group Large Cap Stock Gained Over 480% In 3 Yrs, Brokerage Suggests Buy For 79% Strong Gains

Ventura Securities has come up with a "Buy" on Tata Motors Ltd (TML), a large-cap stock of Tata Group. The brokerage has assigned a target price of Rs 715 apiece on the stock for potential gains of up to 79% considering if stock is purchased at the current market price. Tata Motors is a leading global automobile manufacturing company. Tata Motors is one of India's largest OEMs offering an extensive range of integrated, smart and e-mobility solutions. It has a market capitalisation of Rs 1,33,383 crore.

Stock Performance of Tata Motors

The stock of TML last traded at 401.60 apiece, down 2.54% as compared to its previous close of Rs 412.05 apiece. The stock recorded 52 week low on 12 May 2022 at Rs 366.20 apiece and 52 week high on 17 August 2022 at Rs 494.40 apiece, respectively.

The stock has performed well in the past 3 years, giving 481.68% multibagger return. It surged 0.12% in the past 1 week and 4.34% in the past 3 months, however, it declined 1.6% in the past 1 month. In the past 1 year, it declined 4.68%. In the past 5 years, it gave 24.19% positive return.

Recharged with a new game plan

According to Ventura Securities, Since 2018, the Tata Motors Ltd (TML) management has undertaken several restructuring initiatives which are expected to improve operating efficiency, lower capex and hasten FCF generations for JLR. JLR has also taken a number of initiatives to realign its portfolio to an electric future thus ensuring sustainability and viability of its business model. With the chip availability easing, China opening up and favourable tailwinds emerging from the Inflation Reduction Act (IRA) in the US, competing subsidies announced by the EU and peaking of the interest rate cycle, a new growth cycle is expected to playout for JLR.

The Indian market continues to outperform its international business and this is expected to sustain given the softening of the commodity cycle, strong core sector growth to benefit the CV business, market share gains in the PV segment and first mover advantage in the domestic EV portfolio. "We are extremely bullish on the prospects emanating from the new scrappage policy and this could be a strong trigger for sustainable growth in the medium term across the entire automobile landscape," the brokerage has said.

Buy for a target price of Rs 715 apiece

Ventura Securities said, "We initiate coverage on TML at the CMP of INR 416 per share with a target price of INR 715 per share (3.9X FY26 EV/EBITDA) on an SOTP basis, representing an upside of 72% in 30 months."

Disclaimer - The stock has been picked from the brokerage report of Ventura Securities. 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 consult with certified experts before making any investment decision.