Maintain buy on Tata Motors, target price Rs 178: Analyst

Motilal Oswal has maintained buy rating on Tata Motors in the long term with a target price of Rs 178. The stock ended down 7.4% at Rs 105.80 on Monday while the BSE Sensex closed 1941.67 points down (-5.17%) at 35,634.95.

Company Financials

For the quarter ended 31-12-2019, the company has reported consolidated sales of Rs 71051.42 crore, up 9.71 % from last quarter sales of Rs 64763.39 crore and down -6.84 % from last year same quarter sales of Rs 76264.69 crore. The company has reported net profit after tax of Rs 1954.51 crore in latest quarter.

Investment Rationale


The brokerage has cut its FY21 consolidated EPS estimate for Tata Motors by around 35% to factor in further impact of the coronavirus in the first quarter for JLr and weaker-than expected India CV business in FY21. The reduction in China sales resulting from the Coronavirus impact is estimated to reduce JLR's full-year EBIT margin by about 1%, but free cash flow in the fourth quarter of FY20 is still expected to be modestly positive, said Motilal Oswal.