Tata Motors Limited's shares jumped more than 6 per share to reach a new all-time high of Rs 1,094 following an upgrade to the stock with a 'buy' recommendation from international brokerage Nomura, which noted possible growth opportunities.
The target price set by the analysts is Rs 1,294. This suggests that there is a 26 per cent upside potential from the current market levels. The company's stock has increased by 13 per cent over the last month.
Share performance
The company's shares closed at around Rs 1,089 per share on the Indian bourses. The share also achieved an all-time high level of Rs 1094 per share today at 3.00 pm, just before the shuttering of Dalal Street today.
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Reasons behind upgrade
It stated that the demerger of commercial vehicles (CVs) from passenger vehicles (PV) and the possible large benefits from Jaguar Land Rover's (JLR) execution are value-unlocking catalysts.
According to Nomura's estimates, the phase-out of Jaguar's internal combustion engines (ICE) and the success of new EVs will likely cause the margin of India's largest EV player to rise from 7.8 percent in FY25 to 8.5 percent and further to 10.1 percent by FY27, with the potential to reach 11–12 percent by FY30.
Adressing the debt
Additionally, by FY26 and 27, net cash of Rs 57 and Rs 140 per share is anticipated to replace net debt of Rs 1,600 crore, or Rs 44 per share, in FY24.
New launches
"Demand for EVs and PV in the industry has begun to wane. However, the August 8 launch of Curvv and the FY25 launch of Harrier EV should support volumes, the brokerage stated in a recent note on the business.
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