Two Large Cap Tata Group Stocks You Should Buy As Recommended By Motilal Oswal

Motilal Oswal, a leading brokerage firm has published a brokerage report on TCS Ltd & Tata Motors Ltd, has recommended buying the stocks of the companies for potential gains of up to 20% in 12 months. These two Tata Group stocks are large-cap stocks.

Tata Motors

Tata Motors Ltd is a $34 billion company. 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

Stock Outlook - Today, the stock opened at Rs 438.05/share, currently trading at Rs 436.35/share at the time of writing. The 52-week low of the stock is 268.45/share, and 52 week high is Rs 536.70/share, both recorded last year, respectively. The stock's ROE is negative 25.67%. The PE ratio is also negative at 12.67, while the sector PE ratio is 57.52. PB ratio is 2.98. Its EPS is also negative Rs 34.45.

Returns - The stock has not performed good in both the long as well as short term. The previous week its share price moved up 6.88% and 1.99% in the last 1 month, respectively. In the last 1 year, it has given a positive return of 42.53% and a whopping 178.41% positive returns in 3 years. However, it has not performed well in 5 years and has given negative 4.46%.

Motilal Oswal has given a but calls to Tata Motors, and suggests 'buy' for a target price of Rs 490/share. The stock has potential gains of nearly 13% in 12 months considering the CMP & Target Price.

Motilal Oswal's Comments on Tata Motors Ltd

All three businesses of Tata Motors are in recovery mode. While the India CV business will see a cyclical recovery, the India PV business is in a structural recovery mode. JLR is also witnessing a cyclical recovery, supported by a favorable product mix. However, supply-side issues will defer the recovery process. While there will be no near-term catalysts from the JLR business, the India business (~50% of SoTP) will see a continued recovery.

Motilal Oswal said, " The stock trades at 16.3x FY24E consolidated EPS and 2.8x P/B. We maintain our Buy rating, with a Target Price of Rs 490 (Mar'24 SoTP based)."

 

TCS Ltd

Tata Consultancy Services Ltd. (TCS) is a software and services provider in India. It is part of the Tata Group, which oversees operations for over 100 companies in seven business sectors: communications and information technology, energy, services, materials, engineering, consumer products,  and chemicals. TCS was established in 1968 and became an independent entity in 1995. Within India, TCS is well-known in eGovernance, banking and financial services, telecommunications, education and healthcare markets. 

Stock Outlook - At the time of writing, the stock is trading at Rs 3,120/share. It opened the day at Rs 3,206.15/share. The stock's 52-week low and high are Rs 3,023.85/share and Rs. 4,043/share, respectively. The stock's ROE is 42.99%. The PE ratio is 29.43, while the sector PE ratio is 28.58. The PB ratio is 12.71. The EPS of Rs 106.03.
 
Returns -In terms of returns, TCS has given positive returns on long-term investments, whereas, in the short-term period it has not performed well. Previous wee, its share price slid 1.5%, whereas, in 1 month, it has slid more than 4%, respectively. In 1 year, its share price moved up 0.21%. In 3 and 5 years, the share price gained 50.11% and 180.06%, respectively.

Motilal Oswal has suggested buying the stock for a target price of Rs 3,730/share. Considering the CMP and the Target Price of the stock, it has the potential to gain 20% in 12 months. 

Motilal Oswal's Comments on TCS

Increase in interest rates, slow economic growth, and elevated geo-political tensions have impacted the macro environment and raised concerns over IT spends. Given TCS' size, order book, and exposure to long duration orders, and portfolio, it is well positioned to withstand the weakening macro environment and ride on the anticipated industry growth. TCS has consistently maintained its market leadership position and shown bestin-class execution. It allows the company to maintain its industry-leading margin and demonstrate superior return ratios.  

Motilal Oswal said, "We maintain our positive stance on TCS. Our Target Price of Rs 3,730 implies 28x FY24E EPS, with a 14% upside potential. We reiterate our Buy rating."

Tata Stocks

CMP, Target Price & Potential Upside

Tata Stocks	CMP	Target Price	Potential Upside
Tata Motors	Rs 436.35	Rs 490	13.00%
TCS	Rs 3,120	Rs 3,730	20.00%

Returns

Tata Stocks	1-Year	3-Years	5-Years
Tata Motors	42.53%	178.41%	-4.46%
TCS	0.21%	50.11%	180.06%

Disclaimer

The stocks have been picked from the brokerage reports of Motilal Oswal. 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.