Hemang Jani on why analysts shouldn’t keep on raising Tata Motors target
According to Hemang Jani, the possible impact of the Tata Technology IPO on Tata Motors has already been factored into the stock price. While the IPO is positive, investors should be mindful of double counting its impact. Tata Motors has performed...
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ETMarkets.com
Hemang Jani, Independent Market Expert, says because of the Tata Technology IPO, people are double counting the possible impact on Tata Motors. In the SOTP value, about Rs 20 per share was already factored in. Now, because there is a deal or there is an IPO, we cannot keep on increasing our target because that is already factored in. So, we should be a little mindful about the Tata Technology part but the core business, Tata Motors, is looking quite good.”
It was always Maruti and never Tata Motors. Now suddenly it is only Tata Motors and not Maruti.
I think both of them have done well. Tata Motors more so. In the last six to eight months, it has really surprised everyone because of the way things have turned around on the JLR front and even in the domestic market if you see the CV part, they have done exceptionally well. PV, they have really taken a lot of work. We can see more and more EVs from the Tata Motors side and that is surely positive.
One thing I would like to add here is that because of this IPO of Tata Technology, people are double counting the possible impact on Tata Motors. In the SOTP value, about Rs 20 per share was already factored in. Now, because there is a deal or there is an IPO, we cannot keep on increasing our target because that is already factored in. So, we should be a little mindful about the Tata Technology part but the core business, Tata Motors, is looking quite good.
What is your outlook when it comes to some of the other auto ancillary stocks like Ceat, Apollo Tyres, etc from a fundamental standpoint, largely owing to the raw material prices?
If you look at the performance of Apollo and Ceat this quarter, it is exceptionally good. But what is important is that from here on, you will not see incremental growth because of the way the raw material prices have moved and somewhere the base effect will start kicking in. And the stocks have really run up big time. So, I would avoid a Ceat or Apollo Tyre at this point, maybe at a correction of about 10-12% and re-look at it.
How much of the current setup is pure compulsion in nature? Everybody is of the view that you should not buy, you should not sell, HDFC Bank. Everyone is of the view that Kotak Mahindra Bank is cheap. Everyone is of the view that banks will do very well. Yet, it has been almost a year now since banks are underperforming.
Specific banks, let us say HDFC Bank or Kotak, definitely have underperformed but Bank Nifty or the banking sector overall, leaving aside the last two, three months, over a period of about six to 12 months, has done reasonably okay. What is very important is that even when you see the bond yields going up, over-ownership, large sell-offs by the FIIs, they are able to absorb that quite well, unlike earlier periods. So we may see a little bit of underperformance, but whenever you see corrections, that will be a great opportunity.
HDFC Bank also has gone through a mega event. Nobody had thought of such a big merger come through and the intricacies around it. But the price has settled. So yes, it will test your patience but at these valuations, in the last 15 years with the 16-18% growth visibility, it makes sense to have a positive view at this point.
It was always Maruti and never Tata Motors. Now suddenly it is only Tata Motors and not Maruti.
I think both of them have done well. Tata Motors more so. In the last six to eight months, it has really surprised everyone because of the way things have turned around on the JLR front and even in the domestic market if you see the CV part, they have done exceptionally well. PV, they have really taken a lot of work. We can see more and more EVs from the Tata Motors side and that is surely positive.
One thing I would like to add here is that because of this IPO of Tata Technology, people are double counting the possible impact on Tata Motors. In the SOTP value, about Rs 20 per share was already factored in. Now, because there is a deal or there is an IPO, we cannot keep on increasing our target because that is already factored in. So, we should be a little mindful about the Tata Technology part but the core business, Tata Motors, is looking quite good.
What is your outlook when it comes to some of the other auto ancillary stocks like Ceat, Apollo Tyres, etc from a fundamental standpoint, largely owing to the raw material prices?
If you look at the performance of Apollo and Ceat this quarter, it is exceptionally good. But what is important is that from here on, you will not see incremental growth because of the way the raw material prices have moved and somewhere the base effect will start kicking in. And the stocks have really run up big time. So, I would avoid a Ceat or Apollo Tyre at this point, maybe at a correction of about 10-12% and re-look at it.
How much of the current setup is pure compulsion in nature? Everybody is of the view that you should not buy, you should not sell, HDFC Bank. Everyone is of the view that Kotak Mahindra Bank is cheap. Everyone is of the view that banks will do very well. Yet, it has been almost a year now since banks are underperforming.
Specific banks, let us say HDFC Bank or Kotak, definitely have underperformed but Bank Nifty or the banking sector overall, leaving aside the last two, three months, over a period of about six to 12 months, has done reasonably okay. What is very important is that even when you see the bond yields going up, over-ownership, large sell-offs by the FIIs, they are able to absorb that quite well, unlike earlier periods. So we may see a little bit of underperformance, but whenever you see corrections, that will be a great opportunity.
HDFC Bank also has gone through a mega event. Nobody had thought of such a big merger come through and the intricacies around it. But the price has settled. So yes, it will test your patience but at these valuations, in the last 15 years with the 16-18% growth visibility, it makes sense to have a positive view at this point.
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