Tata Motors share price tag could surge up to 15% in one year, helped by cyclical recovery in domestic and overseas markets, and its luxury unit Jaguar Land Rover’s focus on promoting electric autos. Jaguar Land Rover has set the ball rolling to grow to be a pure electric car brand 2025 onwards. Motilal Oswal has a ‘buy’ rating on Tata Motors stock with a target price tag of Rs 405, implying a 15% upside from the existing price tag of Rs 350. The stock has currently surged 10% so far this month. Ace investor Rakesh Jhunjhunwala owns a 1.3% stake in Tata Motors, his second-biggest stock holding following Titan.
Debt reduction
Jaguar Land Rover’s focus on electric autos, along with the cyclical recovery for Tata Motors’ domestic and international enterprise would support the business minimize debt. It will boost money position as well.
Cyclical recovery taking shape
On the domestic front, Tata Motors has seen enterprise becoming hit by the second wave severely. “Although Tata Motor’s India CV business is on a strong footing, the company may see stagnation in M&HCV volume recovery for now,” analysts at Motilal Oswal mentioned. However, the strides made in the private car segment by Tata Motors have helped the business obtain market place share swiftly. Further, the overseas enterprise is also on the cusp of cyclical recovery. The brokerage firm highlighted that Tata Motors has taken price-cutting initiatives on each variable and fixed fees along with other cyclical and structural alterations. “The convergence of the multiple factors could drive recovery in EBIT margins and leave scope for positive surprises on profitability,” Motilal Oswal mentioned.
Plans to grow to be purely electric automobile brand
The lately released Annual Report of Jaguar Land Rover unveils the ‘Reimagine’ method of the business exactly where each the Jaguar and Land Rover brands would undergo transformation by electrification. The business plans to launch six new all-electric Land Rover models in the next 5 years and Jaguar would be absolutely reimagined as a purely electric brand from 2025. Jaguar highlighted that its ‘Reimagine’ and ‘Refocus’ projects would collectively provide income of more than GBP30 billion and double-digit EBIT margins by the economic year 2025-26. These would produce powerful positive absolutely free money flow from FY23 following an about GBP2.5 billion investment commit (annually) and a reduction in net debt, returning to a net money position in FY25.
Big Bull’s second-biggest bet
Big bull Rakesh Jhunjhunwala purchased a 1.3% stake in the business last year for 4.27 crore equity shares. Since the starting of the third quarter, when Rakesh Jhunjhunwala purchased a stake in Tata Motors, the company’s stock has skyrocketed 256%. The worth of huge bull’s complete stake in Tata Motors stands at Rs 1,500 crore at the existing market place price tag. Tata Motors share price tag took a heavy beating last year in March when the covid induced market place washout saw the stock tank to Rs 65 per share.