Tata Motors Stock Outlook :There is a huge fall in the shares of Tata Motors today. The stock fell by almost 10 percent intraday to Rs 947 (Tata Motors Stock Price), whereas on Friday it had closed at Rs 1047. The company had released quarterly results on Friday, which the market did not like. Brokerage houses are also believing that the growth outlook of the company does not look very strong in the short term. There may be pressure on business for a few days. Many leading brokerages have reduced the rating on the stock. Some have also advised to sell or downsize.
Indegene IPO: Listing deteriorated due to market selloff, still gave 46% return on debut, should I sell shares?
Brokerage Rating and Target Price
ICICI Securities
Rating: REDUCE
Target price: Rs 915
Motilal Oswal
Rating : Neutral
Target price: Rs 955
MK Global
Rating: Reduce
Target price: Rs 950
morgan stanley
Rating : equalweight
Target price: Rs 1100
Jefferies
Rating : buy
Target price: Rs 1250
JP Morgan
Rating : overweight
Target price: Rs 1115
goldman sachs
Rating : neutral
Target price: Rs 1040
Top 100 Stocks: These frontline stocks could not beat FD in 3 year returns, many caused losses to investors
What does the brokerage house have to say?
Brokerage House ICICI Securities Says Tata Motors (TTMT) Cons Q4FY24 EBITDA was in line with our estimate of Rs 17100 crore. EBITDA of CV/PV/JLR has also been as expected at 12%, 7% and 16.3%. With JLR volume growth stagnating at 5%, EBITM stagnating at 8-9% and capex rising to GBP 3.5 billion, we believe that in FY25-26E, it will be difficult for JLR to grow beyond GBP 2.3 billion.
FCF achieved in FY 2024. For the Indian business, with CVs remaining stable and PVs growing in single digits, the brokerage believes the main driver of EBITDA growth will be margin improvement in the EV business. Tata Motors is set to generate net cash in FY2025 from current net auto debt of Rs 1600 crore (peak interest outgo of Rs 10000 crore in FY23). The brokerage believes that Tata Motors P/L will weather the next down cycle better.
SBI: Big brokerages are crazy about this banking stock, target kept up to Rs 1003 with BUY rating
Brokerage House Motilal Oswal says we expect JLR margins to remain stable over FY20-26 due to: 1) rising cost pressures as it invests in demand generation, 2) normalizing mix, and 3) EV ramp-up up, which is likely to weaken margins. In India too, demand for both CV and PV businesses is slowing down.
The brokerage house says that there are several major reasons behind downgrading the rating on the stock to neutral. 1) JLR margins are unlikely to improve given the anticipated rising cost pressures and normalization of mix, and 2) weak outlook for the Indian business. These factors are now working as expected. While there is no doubt that Tata Motors has delivered a very strong performance in its key segments in FY 2024, there are headwinds ahead which could hurt its performance.
The brokerage house has reduced its EPS estimates by 3%, 5% for FY25/FY26. The stock is trading at 18x/15.6x FY25E/FY26E Consolidated EPS and 6.2x/5.3x EV/EBITDA.
(Disclaimer: The advice for investing or selling stocks has been given by experts and brokerage houses. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
