Shares of Tata Motors jumped sharply during Thursday’s intra-day market session as analysts remain upbeat about the company’s future business and growth outlook.
Tata Motors stock rallied over 10 per cent on the Bombay Stock Exchange (BSE) on Thursday and hit a three-year high of Rs 369.60. On the National Stock Exchange (NSE), it was trading at Rs 373.35 at 1.30 pm, up over 11 per cent.
The Tata Group stock, which is a key part of ace investor Rakesh Jhunjhunwala’s portfolio, opened on a positive note and surged during the afternoon session.
WHY TATA MOTORS STOCK SURGED?
It may be noted that the Tata Motors stock was trading at its highest level since April 2018 as multiple brokerages remain optimistic about the company’s future outlook.
Brokerage firm Morgan Stanley has upgraded Tata Motor’s rating and raised the target price to Rs 448 from Rs 298 earlier. The foreign brokerage firm said it expects the company’s Indian business to perform well.
We expect 2022/23 to be strong for Indian autos and Tata’s Indian business, and with its lean cost structure, refreshed model portfolio and high leverage,” the brokerage firm said.
Shares of Indian automakers have rebounded recently after hitting multi-year lows and Morgan Stanley believes that Tata Motors will see the “highest operating and financial leverage gains”.
Meanwhile, Motilal Oswal Securities has also maintained a ‘buy’ rating for the Tata Motors stock with a target price of Rs 400 per share. The brokerage firm said recovery is underway in all three businesses of Tata Motors.
In a report, the brokerage said the Indian commercial vehicle segment will see cyclical recovery while the PV segment will see structural recovery.
While Tata Motors’ Jaguar Land Rover (JLR) business is witnessing a cyclical recovery, supply-side issues could delay the process, said the brokerage. However, it suggested that the company’s India business would continue to recover faster.