Jhunjhunwala Portfolio: Shares of Tata Motors, a major vehicle company included in the portfolio of Big Bull Rakesh Jhunjhunwala, have gained about 24 percent in the last three trading days. It is also seeing an increase today on October 12. Not only domestic brokerage firms but also foreign brokerage firms are bullish on Tata Motors shares. Market experts are positive on the stock due to rising share in passenger and commercial vehicles segment and buoyant volume activity. During trading today, its shares rose by 2 percent to reach a price of Rs 422. This company sells passenger and commercial vehicles in India and luxury vehicles abroad.
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Rakesh Jhunjhunwala earns Rs 324 crore from Tata Motors
Jhunjhunwala, known as the Warren Buffett of India, had bought shares of Tata Motors at a time when its shares were taking a beating during the pandemic. Jhunujhunuwala had bought 4 crore shares of it in September 2020. By the end of June 2021 this year, Jhunjhunwala had 1.14 per cent stake in the company i.e. he had 3.77 crore equity shares. If we assume that he has not reduced his stake after June, then in just three trading days, Jhunjhunwala has made a profit of Rs 324 crore due to the rise in this stock.
ICICI Direct – Buy
Target price – Rs 450
- After years of underperformance, analysts now believe that Tata Motors can catch up with the Nifty Auto Index.
- The brokerage firm estimates that the company’s revenue can grow at a CAGR (Compound Annual Growth Rate) of 20.9 percent by the financial year 2022-23.
- The Indian unit of Tata Motors posted 49 per cent more sales in July-September 2021 on a quarterly basis. There was a 73 percent jump in the sales of commercial vehicles. At the same time, despite the shortage, the sales of the passenger vehicle chip remained the highest in ten years. In July-September 2021, the company sold 84 thousand units of passenger vehicles.
- Analysts have revised the target price and fixed it at Rs 450.
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Morgan Stanley – Overweight
Target price – Rs 448
- The brokerage firm believes that Tata Motors will benefit from the boom in the auto sector.
- In the Bull case, Morgan Stanley believes that Tata Motors’ commercial vehicle revenue can grow at a CAGR of 30 per cent and that of passenger vehicles at a CAGR of 45 per cent.
- Jaguar Land Rover’s supply was hit due to chip shortage, which could impact EBIT margins and increase cash outflows. Most of the people are aware about the chip shortfall, which can have an impact on the share price.
- Analysts at Morgan Stanley have increased the target price of Tata Motors to Rs 448 from Rs 298.
(Article: Kshitij Bhargava)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)