Shares of Tata Motors fell 2.3% to Rs 495 on Thursday. It is believed that this is the effect of the decline in sales of Tata Motors due to the shortage of semiconductors.
Tata Motors: Shares of Tata Motors, included in Rakesh Jhunjhunwala’s portfolio, fell 2.3% to Rs 495 on Thursday. It is believed that this is the effect of the decline in sales of Tata Motors due to the shortage of semiconductors. The company has told in the third quarter business update that the sales of Jaguar Land Rover (JLR) have been affected. Tata Motors said in the information given to the stock exchanges that during the third quarter of the financial year, sales were better than the previous quarter, but due to shortage of semiconductors, sales have been affected. However, analysts are still bullish on the prospects of Tata Motors’ domestic and overseas business. Big Bull Rakesh Jhunjhunwala held 3.76 crore equity shares of Tata Motors at the end of September quarter.
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Impact of semiconductor shortfall on Jaguar Land Rover sales
Tata Motors-owned luxury carmaker Jaguar Land Rover said that semiconductor shortages in the October-December quarter have impacted retail sales. However, there has been some improvement in chip supply and wholesale sales as compared to the previous quarter, he added. Retail sales were down 13.6 percent on a quarterly basis and 37.6% on a year-on-year basis. While the wholesale sales stood at 69,182 units, the production stood at 72,184 units, which is an increase of 8% and 41% over the previous quarter.
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The brokerage firm expects a rise in the company’s shares
- Analysts at Motilal Oswal said that all three businesses of Tata Motors are in recovery mode. He said, “India’s CV business will see a cyclical recovery, with the domestic PV business in structural recovery mode. The JLR is also undergoing cyclical improvement based on the preferred product mix. However, supply-side problems will affect the recovery process.”
- The brokerage firm believes that the domestic business of Tata Motors will continue to improve steadily. The brokerage firm has given a buy rating to this stock with a target price of Rs 610. Shares may rally 23 per cent by March 2024 to reach the target price.
- Yes Securities is also bullish on Tata Motors in 2022. The brokerage firm has fixed a target price of Rs 566 for this. The brokerage firm estimates that the shares of Tata Motors may see a rise in the coming time.
Rakesh Jhunjhunwala’s second biggest bet
Rakesh Jhunjhunwala has the second largest shareholding by Tata Motors value. Big Bull took a stake in Tata Motors in the second half of 2020 and currently holds over 1.11% stake in the company worth Rs 1,830 crore.
(Article: Kshitij Bhargava)
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