Tata Motors Continues Bull Run: Why This Analyst Turned Cautious

Tata Motors’ share price was up around 0.5% to trade at ₹572.90 on Thursday morning – close to its 52-week high of ₹576.55 that it hit on June 8. However, ICICI Securities analysts opine that all the positives are already priced in the stock’s current market price.

The Tata Motors Analyst: Basudeb Banerjee-led team at ICICI Securities downgraded the stock’s rating from ‘buy’ to ‘add’ with a price target of ₹620.

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The Tata Motors Thesis: The brokerage firm that attended the Tata Group company’s investor meet last week said that the management’s guidance about Jaguar Land Rover being net debt-free by FY25 was mostly in line with the outlook. But the firm the noted that company’s guidance of a 10% EBIT margin in JLR’s EV division by FY26 would be tough to achieve considering the growing competition in the luxury EV space.

Talking about the company’s battery cell-making business Agratas, the analysts said that it would cater to both India business and JLR and would benefit the automobile giant by stabilising the supply chain. But in terms of cost, the firm noted that it would not create much of an impact.

The firm in its latest research note, added that “post the 35% rally in the past six months and limited triggers for an increase in FY24E-FY25E estimates,” it sees limited upside potential from present levels.

Price Action: Tata Motors’ share price was up 0.49% to trade at ₹573.10 in the early hours of trading on Thursday.

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Posted In: Analyst ColorAnalyst RatingsICICI SecuritiesTata GroupTata Motors