Rakesh Jhunjhunwala’s favorite stock Tata Motors falls on Rs 1,451-cr Q3 loss, lower JLR sales

Rakesh Jhunjhunwala’s favorite stock Tata Motors fell over 3.5 per cent to Rs 498.55 apiece on Tuesday, a day after the company reported a consolidated net loss of Rs 1,451 crore for the October-December quarter. Jhunjhunwala held 3.92 crore equity shares of Tata Motors at the end of October-December 2021 quarter. The company’s performance was primarily impacted by the ongoing semiconductor shortage issue, which led to lower sales for Jaguar Land Rover (JLR), while commodity inflation bit into margins. 

In the traded volume terms, a total of 8.56 lakh shares exchanged hands on BSE, while 2.05 crore scrips traded on the NSE so far in the day. Analysts at Edelweiss have maintained a buy rating to the stock, with a target price of Rs 616, a 23.5 per cent upside from today’s low. “India and JLR are on the cusp of a strong demand and product-cycle tailwinds. This should facilitate balance sheet improvement–key driver of our Braveheart call,” it said in a report.

In the last five trading sessions, Tata Motors stock has gained nearly 8 per cent, while 72.34 per cent in six months, and a massive 83 per cent in one year. Tata Motors continues to remain Yes Securities’ top pick, given its improving India franchise, early leadership in EVs in India, and JLR’s aggressive cost controls. Analysts have recommended to buy the stock with a price target of Rs 597, a rally of nearly 20 per cent. “Standalone business is in a sweet spot, led by healthy cyclical recovery both in PV and CV, whereas favorable product cycle to help drive JLR outperformance. Despite continued outperformance, Tata Motors is an attractive play among OEMs,” they said.

Analysts at Motilal Oswal Financial Services were also bullish on this Rakesh Jhunjhunwala’s portfolio stock, with a target price of Rs 600 apiece, implying an upside potential of over 20 per cent. “Tata Motors should witness a gradual recovery as supply-side issues ease and commodity headwinds stabilize (for the India business). It will benefit from a macro recovery, company-specific volume/margin drivers, and a sharp improvement in FCF and leverage in both JLR as well as the India business,” they said.

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