As investors responded to different broking suggestions amid worries about the company’s performance and market conditions, Tata Motors shares saw a notable 4.53% decrease on October 29, 2024. The National Stock Exchange (NSE) saw the stock settle at 1,097.65, extending a period of volatility that saw shares fall from their peak of 1,179.00 earlier this year.
Tata Motors is hardly an exception to the difficulties the automobile industry has recently endured. A number of causes, including external market pressures and particular worries about Tata Motors’ operations, especially in its luxury division, Jaguar Land Rover (JLR), have contributed to the drop in share prices. There is disagreement among analysts over whether investors should purchase, sell, or retain their firm stock.
The following broking houses have impacted Tata Motors’ stock performance:
With a target price of ₹1,280, BofA Securities has kept its buy rating, citing positive risk-reward dynamics and optimism about new product introductions in the passenger and commercial vehicle segments. Contrary to early worries, they think that recent incentives for JLR won’t significantly affect volume or profitability.
UBS, on the other hand, has recommended selling JLR with a target price of ₹825, citing worries about the company’s shrinking margins and possible difficulties in the Indian passenger car market. They are cautious about the possibility of additional drops brought on by exchange rate swings and economic downturns in important markets like China.
Divergent views have also been expressed by other analysts. For example, Anand Rathi has a more optimistic target price of ₹1,254, but Motilal Oswal has set a target price of ₹990.
Despite previous downturns, Tata Motors has shown resiliency in several areas. With an annual growth rate of roughly 26.61%, the company’s revenue growth over the last year surpassed that of several of its rivals. However, investors were alarmed by recent quarterly data that showed an 11% year-over-year drop in overall revenue.
Improved profitability was shown by the company’s remarkable return on equity (ROE), which was 36.97%, much higher than its five-year average of -1.07%. In spite of this, quarterly sales dropped by about 9.74%, which was one of the worst results in three years.
Investors are faced with a difficult choice in light of the conflicting advice from broking firms and the fundamental financial performance of Tata Motors. Given BofA’s positive forecast, investors looking for long-term growth may want to hold or purchase at lower prices. Risk-averse investors, however, should take note of UBS’s cautious approach and think about selling to reduce possible losses.
Disclaimer: This article’s content is sourced from broking houses and investment specialists; it does not reflect the opinions of Kadam Buzz. A competent expert must be consulted before making any decisions pertaining to investments.
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