Tata Motors Share Price Gains Momentum as Emkay Upgrades Stock Outlook

Tata Motors Stock Price Recovers

Shares of Tata Motors got a much-needed respite in early trade on September 19, snapping its three-day losing streak on the stock market as Emkay upgraded the counter to 'buy' from 'add' with a target price of Rs 1,175 per share. The price rose over a percent to Rs 977 on the NSE.

With this price target, Emkay forecasts an upside potential of about 22 percent. The Tata Motors stock has seen quite a correction, slipping nearly 13 percent in the past month. Emkay notes that while China remains a relatively smaller market for Jaguar Land Rover (JLR), the company’s profitability and deleveraging story remain intact.

Improved Demand in Domestic Market

In the domestic market, Tata Motors is experiencing an improved demand and margin outlook for its commercial vehicle (CV) business. Additionally, in the passenger vehicle (PV) segment, the company is better positioned than the industry due to successful new launches and lower inventory levels. Emkay highlights a healthy profitability outlook for Tata Motors, coupled with undemanding valuations, making it an attractive buy at current levels.

UBS Maintains Caution

This downturn in the counter follows UBS Securities maintaining its 'sell' call on India's largest EV player, mentioning further downside risk from margin slippage at Jaguar Land Rover and within the domestic passenger vehicles segment. Accordingly, UBS retained its price target of Rs 825 for Tata Motors stock, implying a downside potential of over 20 percent from the previous close.

On Tuesday, 1.9 crore shares or 0.4 percent of the total equity of the company changed hands in a block deal. Trust Deed, TML Securities Trust sold 1.14 crore shares on the stock exchanges today for the purpose of distribution of fractional share entitlement. At about 9:20 am, shares of the company were trading at Rs 974, higher by 1.2 percent from the last close on the NSE.