Rakesh Jhunjhunwala Portfolio Stock: Tata Motors says that demand is strong, further improvement will be seen in the supply side. After the quarterly results, brokerage houses are also looking bullish about the stock.
Rakesh Jhunjhunwala Portfolio: The December quarter has been a weak one for Tata Motors, a leading auto company of the Tata Group. The company has incurred a huge loss of Rs 1516 crore in the December quarter. However, the company’s loss has decreased compared to the June quarter. JLR’s performance has also been weak. However, the shortfall of the semi-conductor has been cited as the main reason behind this. The company says that the demand is strong, further improvement will be seen in the supply side. After the quarterly results, brokerage houses are also looking bullish about the stock. He says that the chip shortage is not permanent. As the chip shortage problem is resolved, the supply will increase. Demand is stronger than ever. In such a situation, the long term outlook of the company is strong.
business outlook positive
Brokerage house Sharekhan has given investment advice in Tata Motors and has set a target of Rs 610 for the stock. From the current price of Rs 505 to Rs 105 per share or 20 to 21 percent return can be given. The brokerage house says that the December quarter results of Tata Motors are better than expected. The company had anticipated higher losses. JLR’s operational performance has been strong. Overall performance has also improved as compared to the second quarter. Business outlook is positive. The company will benefit from further chip shortages, new launches and better macro outlook. The brokerage estimates that the company’s profit during FY2023E can be 11,708 crores. The revenue growth during FY2021E-FY2023E is likely to be 16.7 per cent CAGR.
JLR demand strong
Brokerage house Motilal Oswal has given a target of Rs 600 while recommending investment in Tata Motors stock. The brokerage house says that the performance of the company has been mixed in the December quarter. The performance of JLR is improving. The supply environment is expected to improve. The demand for JLR is strong. The India business is expected to do well on stable commodity prices and strong demand. However, the brokerage house has cut the FY23E EPS by 10 per cent. The brokerage says that due to the lack of chips, the short term sentiment will be affected.
Company results at a glance
Tata Motors has incurred a loss of Rs 1516 crore in the December quarter. The company had a profit of Rs 2906.5 crore in the same quarter a year ago. Consolidated earnings declined 4.5 per cent year-on-year in the December quarter and stood at Rs 72,229 crore. The EBITDA margin declined from 16 per cent to 9.8 per cent year-on-year, while the consolidated EBITDA declined to Rs 7078 crore. The performance of Jaguar Land Rover has also been weak.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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