Tata Motors, a worldwide vehicle maker, rose 6% to a new all-time high of ₹1,084.90 per share in today’s session after being upgraded by Japanese brokerage company Nomura.
Nomura upgraded the stock to ‘Buy’ from ‘Neutral’ and raised its target price to ₹1,294, up from ₹1,141 previously. This revised goal represents a potential 26% increase over the stock’s previous close.
What is the most recent news about Tata Motors?
Tata Motors has unveiled the SUV Coupe Curvv, which will be available in both ICE and EV variants starting next month.
The brokerage stated that Tata Motors’ strategy of transitioning Jaguar Land Rover (JLR) from premium to luxury categories is likely to maintain the brand viable in the face of increased competition. It stated that JLR’s incentives for Land Rover have remained well-controlled, in contrast to other OEMs’ patterns.
Although volume growth is expected to be modest, with Nomura projecting volumes of 402k, 405k, and 435k in FY25-27, profitability growth is expected to be strong due to rising average selling prices (ASPs) and increased margins.
Why is Tata Motors growing today?
Tata Motors Ltd shares rose to a record high Thursday after international brokerage Nomura raised its rating to ‘Buy’ from ‘Neutral’. It also raised its price target by 26%, to Rs 1,294 from Rs 1,141 before.
Nomura predicts that JLR’s ASP will climb from around GBP 72,000 in FY24 to GBP 77,000 in FY27. It expects EBIT to expand by 8.5% in FY25, reaching 10.1% in FY27, with the potential to rise to 11-12% in FY30.
It believes that the phase-out of Jaguar’s ICE vehicles, the success of new Jaguar EVs (JEA platform), and the introduction of more premium Range Rover variations will all contribute to growth. Despite a drop in demand in the passenger vehicle (PV) and electric vehicle (EV) sectors, it expects new launches such as the Curvv (planned for August 7) and Harrier EV in FY25 to drive overall volumes.
Nomura forecasts a 5% volume CAGR in India’s medium and heavy commercial vehicle (MHCV) category from FY25 to FY27, with EBITDA margins remaining around 11.5% due to strong demand.
What is Tata Motors’ target?
Tata Motors Share Price Today Live: The analyst recommendation trend is displayed here, with a current rating of Buy. The median price target is ₹1100.0, 9.75% over the current market price.
According to Nomura, Tata Motors’ revenue for Q1 FY25 is expected to be ₹1.09 lakh crore, up 7% from the previous year. It estimates the EBITDA margin to be about 13.8%, down 40 basis points from the previous quarter owing to seasonal considerations.
JLR expects revenue to reach GBP 7.3 billion, representing a 6% year-on-year increase, with an EBITDA margin of 16.1%, down 25 basis points quarter on quarter.
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