Billionaire investor Rakesh Jhunjhunwala, one of his favorite stocks – Tata Motors – is expected to rise 29 percent, with various brokerages estimating in-line / healthy March quarterly results for the 2021-22 (Q4FY22) fiscal year.
Rakesh Jhunjhunwala, also known as the Big Bull of the Indian stock market, has 39,250,000 equity shares, which is about 1.2 per cent in Tata Motors, according to the company’s latest shareholding pattern on the BSE.
“Tata Motors’ Q4 earnings were an operational beat and JLR results were on the line, where several insiders were positively surprised such as net auto loan reduction. Some variables may be moderate in the near-term as 1QFY23 to see the dual effect of running chip deficits, Yes Securities said.
The stock remains the top pick of Yes Securities, given its advanced franchise in India and early leadership in EV, in addition, its standalone business is in a sweet spot where healthy PV and CV lead to healthy cyclical recovery where optimal product cycle helps JLR outperformance drive.
The recent valuation contraction has made Tata Motors a more attractive game among OEMs, Yes Securities noted. It maintains a buy rating with a target price of Rs 520 per share, which translates to an increase of about 29 percent since Friday’s close.
Auto Major should witness a gradual recovery as supply-side issues ease and commodity headwind stabilizes (for business in India), Motilal Oswal said in his Q4 earnings review.
The company will benefit from a macro recovery, company-specific volume and margin drivers and a sharp improvement in free cash flow and leverage in both JLR and India businesses, it said.
Motilal Oswal maintains a buy rating with a target price of Rs 485 per share (up 20 per cent), and trades the stock at 13.4x FY24E with a P / E and 3.2x EV / EBITDA ratio.
According to Edelweiss Research, Tata Motors’ Indian business has compensated for the loss in JLR. It adds that improved products (and lower hedging ratios) are also a cause for concern.
The CV and Macro headwind brokerage brokerage factor, allocating 15x EV / EBITDA and holding a buy stand with a target price of Rs 485 per share, signaling a 20 per cent rise in share price.