Sell Tata Motors: While most of the brokerages/analysts have given buy advice on Tata Motors, brokerage house UBS has given sell advice.
Tata Motors Stock Price: In terms of investment value, Tata Motors, the third largest stock in Rekha Jhunjhunwala’s portfolio, has seen a significant gain of 30 per cent so far this year. There is also improvement in the performance of the company in the March quarter. At the same time, retail and wholesale volumes have also increased. But even after that, the brokerage house UBS has alerted investors regarding the stock. The brokerage house says that this rally in the stock does not seem to be sustainable. JLR’s recent strong performance is also not looking sustainable. In this, the market is underestimating the EV risk. There may be a decline in this stock in the coming days.
Sell rating, target Rs 450
Brokerage house UBS has given a sell rating on Tata Motors stock with a target price of Rs 450. The current price is Rs 520, which means there is a risk of a loss of Rs 70 or 13 to 14 per cent per share. The brokerage has initiated coverage on the stock. Let us tell you that the stock has gained more than 29 percent so far this year.
UBS believes that the recent strong performance of JLR, which has outperformed the S&P BSE Auto index by 23% so far this year, does not appear to be sustainable. This performance was driven by a volatile product mix and minimal discounting. UBS has described this as a favorable opportunity for investors to sell their holdings.
UBS suggests that investors may be overlooking the significant impact of electrification on the global premium car market. Highlighting the disruption caused by electrification in China to the profit pools of premium brands across the world, the brokerage said it expects a similar trend in other sectors.
As a result, UBS expects JLR’s margin to fall to around 4% in FY25/FY26. At the same time, there is apprehension about the company’s guidance to achieve double-digit EBIT margin in the mid-term. The brokerage also cautioned against JLR’s strategy of prioritizing Jaguar and introducing 3 new electric vehicle models, citing the lack of success in previous attempts to revive the brand.
Rekha Jhunjhunwala holds 52,256,000 shares
Veteran investor Rekha Jhunjhunwala has 52,256,000 shares of Tata Motors in her portfolio, or 1.6 per cent stake. The value of these shares at the current share price is Rs 2,667.1 crore. In terms of value, it is the third largest stock in Jhunjhunwala’s portfolio after Titan Company and Metro Brands.
5408 crore profit in March quarter
Tata Motors has made a profit of 5408 crores in the March quarter, while the company had a loss of 1032.84 crores in the same quarter a year ago. Even on a quarterly basis, PAT has increased by 83 percent. There has been 35% YoY growth in revenue. The revenue from operations was 105932.35 crores, which was 78,439.06 crores in the same period a year ago.
