Buy Tata Motors, target price Rs 400: Motilal Oswal

Motilal Oswal has buy call on Tata Motors with a target price of Rs 400. The current market price of Tata Motors Ltd. is Rs 316.95. Time period given by analyst is one year when Tata Motors Ltd. price can reach defined target.

Tata Motors Ltd., incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 105220.55 Crore) operating in Auto sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 89319.34 Crore, up 16.96 % from last quarter Total Income of Rs 76365.79 Crore and up 41.65 % from last year same quarter Total Income of Rs 63057.43 Crore. Company reported net profit after tax of Rs -7510.85 Crore in latest quarter.


Investment Rationale
All three TTMT’s businesses are in recovery mode. While the India CV business would see a cyclical recovery, the India PV business is in a structural recovery mode. JLR is also witnessing a cyclical recovery, supported by a favorable product mix. However, supply-side issues will defer the recovery process. While there would be no near-term catalysts from the JLR business, the India business (~50% of SoTP) would see a continued recovery. The stock trades at 9.2x FY23E consolidated EPS and 1.7x P/B. The brokerage maintains Buy rating with a TP of INR400/share (Mar’23E SoTP-based).

Promoter/FII Holdings
Promoters held 46.4 per cent stake in the company as of March 31, 2021, while FIIs held 13.8 per cent, DIIs 12.1 per cent and public and others 27.8 per cent.