Brokerages See Tata Motors Shares Breaching ₹1,100 Mark And More

Tata Motors‘ share price continued to extend gains for the sixth straight session hovering close to the ₹1,000-mark on Wednesday morning.

What Happened: Shares of the auto giant are upbeat today as two global brokerages maintained their positive outlook on the stock. Morgan Stanley maintained its “equalweight” rating for the stock with a price target of ₹1,100. The brokerage said that the auto major has made significant strides in ensuring that its individual businesses are now self-sustaining. T

The analysts added that the company’s management views demergers as the next logical step to further empower each business segment, allowing for more focused growth and operational efficiency. The supportive macroeconomic environment is expected to aid a longer cycle in the commercial vehicle (CV) sector, with a strong double-digit margin target set for the CV business, the analysts added.

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In the passenger vehicles (PVs) segment, the Tata Group company targets a 16% market share by FY27 and aims to reach 18-20% by FY30. The brokerage also highlighted that the internal combustion engine (ICE) segment’s margin target is in the double-digits, with the EV business expected to achieve EBITDA break-even by FY26.

The company anticipates positive and growing free cash flow (FCF) from its ICE business, with neutral FCF in EVs over the medium term.

CLSA maintains a positive outlook on Tata Motors, highlighting the management’s confidence in winning in the domestic segment. The brokerage firm maintains its target price of ₹1,181 and an “outperform” rating on the auto giant. CLSA notes Tata Motors’ sustainable share gains in the PV segment, particularly with continued leadership in EVs. The demand for commercial vehicles (CV) is also expected to grow at a 4-5% compound annual growth rate (CAGR) for the next few years.

Kotak Securities also maintained its “add” rating on the stock in a note released yesterday. Phillip Capital also maintained its “buy” rating with a price target of ₹1,170.

Price Action: Tata Motors’ share price was up 0.47% to trade at ₹991.75 as the markets opened on Wednesday.

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