Jefferies believes ‘still time to buy’ this Tata Group stock?

JLR has been badly hit by chip shortage but the pressure is easing. “JLR is improving sequentially as chip shortages ease, and should fuel the ramp-up of the next generation RR/RR-Sport. The early lead in India EVs offers great option value. Tata is its top auto stock pick and accounts for 67% of its India turnover 625 price target,” the note said.

buy at jefferies rating multibagger stock Comes with a target price of 625 per share as it believes that there is still time to buy Tata Motors shares with a possible upside scenario target price Downside of 770 and 415.

“Tata reworked its strategy under a new CV (Commercial Vehicle) business head from 2017 with a focus on sales engagement, dealer profitability and servicing. Tata’s truck share rose to 55% in 9MFY22 , which is a 6-year high. Truck demand is improving. From a severe slowdown, and we expect 22% industry CAGR in FY22-24, Tata is in a better position this cycle.”

In October last year, the auto arm of the Tata group said that the TPG Rise Climate Fund would lead investments in the automaker’s new company that will house its passenger electric vehicle business.

Tata has taken an early lead, although electric vehicles (EVs) account for 6% of India’s PV volumes. Jefferies believes it intends to expand its portfolio from 2 EVs currently to 10 by FY26, and the recent investment by TPG gives it the balance sheet strength to drive electrification.

According to the BSE shareholding pattern, the stake of veteran investor Rakesh Jhunjhunwala in Tata Motors has risen to 1.18 per cent as of the December-end quarter.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.