Motilal Oswal Initiated Buy Call For This Automobile Stock For 20% Returns, QoQ Production Increased By 41%

The brokerage firm Motilal Oswal has recently initiated a buy call for the stock of Tata Motors, for 20% returns in 1 year. Tata Motors' production has increased 41% QoQ to 72.2k units in 3QFY22, reflecting an improvement in chip supply.

Target Price

The Current Market Price (CMP) of Tata Motors is Rs. 507. Motilal Oswal has estimated a Target Price for the stock at Rs. 610. Hence this company is expected to give a 20% return, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 507
Target Price	Rs. 610
1 year returns	20.00%

Company performance

Tata Motor's net sales were Rs. 2,498 b in FY 21, which is expected to grow to Rs. 3,032 b in FY 22. The company's EBITDA stood at Rs. 357.8 b, which is expected to grow to Rs. 371.1 b. Additionally, the company's adj. PAT stood at Rs. 2.2 b, which is expected to grow to Rs. -20.9 b. This company's chip shortage improves QoQ. However, Jaguar Land Rover's 3QFY22 wholesale volumes (excluding CJLR JV) declined 33% YoY (+9% QoQ) to 69.2k units. The wholesale volumes of Range Rover, Range Rover Sport, and I-Pace grew 92%, 64%, and 34.5% QoQ, respectively.

Comments by Motilal Oswal

Motilal Oswal commented, "TTMT's all three businesses are in recovery mode. While the India CV business would see cyclical recovery, the domestic PV business is in a structural recovery mode. JLR is also witnessing a cyclical recovery underpinned by a favorable product mix; however, supply-side headwinds will defer the recovery process. While there would be no near-term catalysts from the JLR business, the India business (~50% of SOTP) would see sustained revival." The total order book of the company has expanded to over 154k units in 3QFY22.

(Also read: Motilal Oswal Recommends This IT Stock To Buy, For Steady Near Term Growth)

 

 

About the company

Tata Motors Limited, a US $35 billion organization, is a leading automobile manufacturer with a portfolio that includes a wide range of cars, utility vehicles, trucks, buses, and defence vehicles. Our marque can be found on and off-road in over 125 countries around the globe. To achieve this target, we have established top-of-the-line manufacturing, R&D, and design facilities in more than 25 sites across India, Europe, China, the UK, and North America.

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.