ICICI Securities issues ‘Buy’ call for Tata Motors — know target price, revenue estimates and more

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ICICI Securities issues ‘Buy’ call for Tata Motors — know target price, revenue estimates and more
ICICI Securities issues ‘Buy’ call for Tata Motors — know target price, revenue estimates and moreBCCL
  • The development comes only a day after Tata Motors announced its financial performance for FY2021.
  • ICICI Securities noted that Tata Motors has once again managed to increase its market share in the domestic passenger vehicle segment.
  • The brokerage now estimates Tata Motors to cross ₹3 lakh crore in revenue by the end of this fiscal year.
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ICICI Securities on Friday morning issued a ‘Buy’ call for the shares of Tata Motors as the company has once again managed to increase its market share in the domestic passenger vehicle segment. It has, however, revised the target price to ₹677 now.

The brokerage house had also issued a buy call for Tata Motors in March 2022, with a target price of ₹703.

The development comes only a day after Tata Motors announced its financial performance for the fiscal year 2022 that ended in March this year. The automobile maker reported a revenue of ₹2.78 lakh crore in the year-long period, while its net loss was stuck at ₹13,600 crore.

The company’s shares surged roughly 9% on Friday morning, trading at ₹407 at 11:11 am on May 13.

ICICI Securities now estimates Tata Motors to cross ₹3 lakh crore in revenue by the end of this fiscal year. The “continued market share gains” in the domestic passenger vehicle business, commercial vehicle (CV) upcycle and delivery on free cash flow (FCF) generation, coupled with “aggression” in building the electric vehicle portfolio resonate well with investor expectations, the brokerage firm added.

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“For JLR [Jaguar Land Rover], production recovery amidst 168k unit orderbook and low inventory levels amidst weak macros in target markets, would help it sail through the current tough times by growing on a benign base,” the analyst added. JLR is a subsidiary of Tata Motors, which was formed after the acquisition of Jaguar Cars Limited and Land Rover Limited from Ford in 2008.
FY2021FY2022FY2023EFY2024E
Revenue₹2.4 lakh crore ₹2.7 lakh crore ₹3.3 lakh crore ₹3.7 lakh crore
Source: ICICI Securities

ICICI Securities highlighted that Tata Motors has exceeded its saving target by half a billion pound sterling in FY2022. Besides, it has also managed to reduce its warranty spends by a tenth and increase margins in commercial vehicles due to stability in steel prices. The brokerage also noted that the record revenue and higher mix led by profit before tax led to breakeven for the passenger vehicle segment.

The company’s net debt also reduced to ₹11,700 crore between January and March, compared to ₹48,700 crore that was reported in October and December quarter.

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