TATA Motors, making losses but a Buy!!🤔
Q4FY22 results(Consolidated revenue de-grew by 11.5% YoY, JLR Revenue was down 27.1%, EBITDA de-grew by 19.1%) lagged expectations, while operational performance continues to improve sequentially across business verticals.
Then why are brokerage houses bullish on Tata Motors??
Let's try to understand with the following pointers:
• Amidst all this recent Quarter performance, the overall yearly performance is showing a good positive traction (Loss for Q4FY22 was INR 10,328 Mn v/s INR 76,054 Mn in the year-ago quarter)
• As we can see in the following image, Tata Motors is showing it all time high sales volume recently grabbing the no 2 position.
• Domestic PV retails were up 44% YoY; EV Sales hit a new peak of INR 9,100 units,
• Tata Motors expects the domestic passenger vehicle industry to surpass the peak sales number of 34 lakh units achieved in FY2019 this fiscal on the back of robust demand and less COVID-related disruptions that were witnessed in the last two years, according to a top company official.
• The company expects a better business environment this fiscal even as chip shortages continue to making it challenging to cater to the enhanced demand
• The company is also taking significant steps to reduce cost structures across the organisation
• Demand for the electric vehicles (EVs) and CNG models is increasing at a faster rate in the domestic market due to a rise in fuel cost and Tata Motors have a good hold in these categories
• With demand for EVs remaining very strong, the company is fast ramping up the supplies and it plans to launch 10 EVs over the next five years
• It recently overtook Ford Motor company's plant in Gujrat.
• Leading brokers like KR Choksey, ICICI Direct, Share khan & Prabhudas Liladhar are bullish on it and gave target price of Rs.630, 500, 516 & 600 respectively
• All together with improving state of the company, Tata Motors looks a good buy in the range of Rs. 420-440 with Target Price of Rs. 600+ in the long term
Note: The views here are personal and subject to market risk kindly consult your advisor before buying/selling.
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