Tata Motors: Invest Now Or Miss The Bus?

As of July 2024, Tata Motors is a somewhat overvalued stock with a semi-strong price trend, indicating that its price is likely to rise somewhat in the short term. The company has a strong business cycle at JLR, with a product launch planned for the Indian passenger vehicle business in 2HFY25. Its consolidated net profit for the January-March period was up 3.2 times on a year-on-year basis. However, its March quarter earnings failed to cheer investors, with the stock plunging 9.44% to Rs 948 per share on the BSE.

Tata Motors share price target

Tata Motors' share price target is a highly debated topic among investors and analysts. Here is an overview of the varying opinions and predictions about the company's share price target:

• Jefferies: Jefferies has a 'buy' rating on Tata Motors with a target price of Rs 1,250, raised from Rs 1,100 previously. They maintain a positive outlook due to the strong business cycle at JLR, upcoming product launches in India's passenger vehicle business, and strong deleveraging.
• Motilal Oswal: Motilal Oswal has a neutral rating on Tata Motors and has trimmed its target price to Rs 960. They expect JLR margins to remain stable over FY24-26 due to rising cost pressures, normalising mix, and EV ramp-up, which may dilute margins. They also anticipate moderation in demand for both CV and PV businesses in India.
• Morgan Stanley: Morgan Stanley has downgraded Tata Motors to 'equal-weight' from 'overweight' but increased the target price to Rs 1,100 from Rs 1,013.
• JPMorgan: JPMorgan maintains an 'overweight' view on Tata Motors with a raised target of Rs 1,115 from Rs 1,050.
• Goldman Sachs: Goldman Sachs has double-downgraded the stock to 'neutral' from 'buy' and slashed the target price to Rs 1,040 from Rs 1,080.
• Nomura: Nomura has a buy call on Tata Motors with a target price of Rs 1,057.
• CLSA: CLSA has retained an outperform call with a raised target of Rs 1,181 from Rs 1,133.
• TipRanks: Based on Wall Street analysts' predictions, Tata Motors' average 12-month price target is $30.00, with the highest forecast at $30.00 and the lowest at $30.00. This represents a potential upside of 19.28% from the last price of $25.15.
• MoneyWorks4Me: MoneyWorks4Me's Price Trend analysis indicates that Tata Motors is 'Semi Strong', suggesting that the share price is likely to rise somewhat in the short term. However, they recommend checking the ratings on Quality and Valuation before investing.
• Kushal Gandhi, Technical Analyst at StoxBox: Gandhi recommends buying Tata Motors with a target price of 1170 and a protective stop at 964. He highlights the stock's resilience to drawdowns, indicating that experienced investors are maintaining their positions. The current accumulation phase indicates the addition of buyers, strengthening the primary trend.

In summary, opinions on Tata Motors' share price target vary, with some analysts recommending a 'buy' rating while others have a more neutral outlook. The average price target represents a potential upside from the current share price, but it is essential to conduct thorough research and consult with investment advisers before making any investment decisions.

Tata Motors' financial performance

Tata Motors Financial Performance

Tata Motors is a subsidiary of the $100 billion Tata Group, which was founded in 1868 and is currently India's largest automobile manufacturer. The company manufactures cars, utility vehicles, pick-ups, trucks, and buses, and it has a strong global presence.

In terms of its financial performance, Tata Motors has had a mixed record over the past decade. According to Moneyworks4me, Tata Motors' 10-year financial track record indicates that it is an average-quality company with a somewhat good past 10-year financial track record.

Looking at more recent performance, Tata Motors reported a consolidated net profit of Rs 17,407.2 crore for the January-March period of 2024, which was up 3.2 times on a year-on-year basis. This strong performance led to brokerages such as Jefferies maintaining a positive outlook on the company, with a 'buy' rating. However, other investment firms, such as Goldman Sachs, have downgraded the stock.

As of July 1, 2024, Tata Motors' share price was ₹1,001.65, with a market cap of ₹3,29,107.2. The P/E ratio was 41.65, and the P/B ratio was 10.99. The 52-week high and low of the stock were ₹1,065.6 and ₹585.0, respectively.

Overall, Tata Motors has a history of financial performance that is somewhat mixed, with some investment firms maintaining a positive outlook while others have downgraded the stock.

Tata Motors' valuation

Tata Motors Valuation

Tata Motors Ltd. is an automobile manufacturer with a diverse portfolio, including cars, utility vehicles, trucks, buses, and defence vehicles. The company operates in India, China, the US, the UK, the rest of Europe, and internationally.

As of July 1st, 2024, Tata Motors' share price was ₹1,001.65, with a market cap of ₹3,29,107.2. The P/E ratio was 41.65, and the P/B ratio was 10.99. The 52-week high and low were ₹1,065.6 and ₹585.0, respectively.

Tata Motors' stock performance has been rated as 'Semi Strong' by MoneyWorks4Me, suggesting that the price is likely to rise somewhat in the short term. However, the overall quality of the company has been rated as average, and the stock is considered somewhat overvalued.

According to Alpha Spread, the intrinsic value of one Tata Motors stock under the Base Case scenario is ₹1,416.09. Compared to the current market price of ₹1,016.75, this suggests that Tata Motors is undervalued by 28%. The company's profitability score is 56/100, and its solvency score is 44/100.

Wall Street analysts have a positive outlook on Tata Motors stock, with an average 1-year price target of ₹1,097.34. Jefferies has maintained a 'buy' rating, while JPMorgan has an 'overweight' view on the stock. However, Goldman Sachs has downgraded the stock to 'neutral'.

Tata Motors' price trend

Tata Motors Share Price Trend

Tata Motors Ltd. is a global automobile manufacturing company with a diverse portfolio that includes cars, sports utility vehicles, trucks, buses, and defense vehicles. As of July 2024, the company's share price has been experiencing an upward trend.

On July 9, 2024, Tata Motors' share price stood at 1002.60 Indian rupees, with a prediction of reaching 1012 rupees the next day. The share price did increase, and by July 11, 2024, it was trading at 1,021.05 Indian rupees, with a 1.55% increase from the previous day's close.

Looking at a longer-term trend, Tata Motors' share price has shown a consistent upward movement. For example, on July 15, 2023, the share price was 435.75 Indian rupees, and by July 15, 2024, it had more than doubled to 1003 rupees.

Analysts' predictions for the future share price of Tata Motors vary. Some sources provide specific price targets, such as a maximum price of 2007 rupees and a minimum of 1709 rupees in August 2025, and a maximum of 2838 rupees and a minimum of 2285 rupees in November 2025. Other sources offer a more general outlook, with predictions of the stock being bullish or bearish in the short term.

Tata Motors has a market capitalization of Rs 3,39,935 Cr as of July 11, 2024, and it is considered a Large Cap company. The company's top management includes Mr. Ratan N. Tata as Chairman Emeritus and Mr. N. Chandrasekaran as Chairman and Non-Executive Director.

Tata Motors' quality

Tata Motors is a $45 billion global automobile manufacturing company and part of the $100 billion Tata Group. It is India's largest automobile manufacturer, producing an extensive range of cars, sports utility vehicles, trucks, buses, and defence vehicles.

Tata Motors has been recognised for its quality and design, receiving several awards over the years. The company is driven by a passion for excellence, which is reflected across all its operations. In the manufacturing process, Tata Motors ensures that every step—from design to production to assembly—follows the highest standards of quality.

The company has also been recognised for its contribution to the 'Skill India Mission' and has received awards for its excellence in commercial vehicles, reflecting the quality of its passenger vehicles.

• India Risk Management Award (IRMA) - Supply Chain Risk Management Award (2016)
• Golden Peacock Environment Management Award (GPEMA) in the Automobile sector (2016)
• Ranked among the top 25 best companies to work for by Business Today survey (2016)
• Best Learning Organisation of Asia (2011-12)
• Business Today 'Best Companies to Work For' Award (2017)
• TML Starbus Hybrid received Special Recognition at the Apollo CV January Awards (2018)
• TML Nexon received the Best Design Award by Autoportal (2018)
• Tata Hexa won 'Best 4X4 of the Year' at Autoportal Best Car Awards (2018)
• Tata Harrier won the Best Design and Styling award at the Autocar India Awards
• Listed in the Top 10 Companies in the Indian Corporate Governance Scorecard by BSE Limited, the International Finance Corporation, and the Institutional Investor Advisory Services (IiAS)

In terms of investment, Tata Motors shares have been given a 'buy' rating by Jefferies, with a positive outlook on the company given the strong business cycle at JLR, product launches in India, and strong deleveraging. However, it is always recommended to consult with an investment adviser before making any financial decisions.

Frequently asked questions