28 March 2024 – The domestic brokerage Prabhudas Lilladher (PL) downgraded the Tata group stock to “accumulate” from “buy” after a 145% increase in share price in the last year. However, it raised its target price based on JLR volume ramp-up, increased market share in the PV segment, and strong free cash flow (FCF) performance. Tata Motors’ stock increased 0.6% on Thursday to close at Rs 985.40. PL’s target price for the stock indicates a possible increase of 9.09 percent over this mark. The stock has increased by 20% so far in 2024 and by 60% over the past half-year.
“We remain positive on Tata Motors based on JLR’s volume ramp-up, leading to strong revenue, profitability, and FCF; a focus on increasing market share in the PV segment through model launches and rising EV penetration; and profitable and robust FCF performance, driven by margin expansion in the CV segment,” PL stated.
Conclusion
With a combined earnings per share (EPS) drop of 0.4% for FY24-FY26E and a projected CAGR of 12.4% during the same period, the brokerage company revised its expectations, mainly for the India operations.
