Can Tata Motors Share Price Hit 1,200? Analysts Weigh In on 8.97% Upside Potential
As of August 29, 2024, Tata Motors’ share price has reached an impressive ₹1,121, up 0.67% from the previous close of ₹1,085.15. This surge in price has caught the attention of investors and analysts alike, who are closely monitoring the company’s performance and future prospects.
Main Points
Technical Analysis
From a technical standpoint, Tata Motors stock is comfortably placed above its key moving averages, around 5% and 19% from the 50-day moving average (DMA) and 200-DMA, respectively. The stock has recently broken out of a base in its weekly chart and is trading around 1% from the pivot point, which is considered the ideal buying range for a stock.
Fundamental Analysis
Tata Motors has reported an operating revenue of ₹443,739.69 crore on a trailing 12-month basis, with an annual revenue growth of 27%, which is outstanding. The company’s pre-tax margin stands at 6%, which is considered okay, while its return on equity (ROE) is an exceptional 36%. However, the company’s debt-to-equity ratio of 73% is a bit higher.
Analyst Recommendations
According to 32 analysts offering long-term price targets for Tata Motors Ltd., the average target price is ₹1,170.97, which suggests a slight upside of 8.97% compared to the current price of ₹1,074.45. The analysts’ consensus rating for Tata Motors is a “Buy,” with a target price range of ₹1,065 to ₹1,179.
52-Week High and Low
Tata Motors 52-week high stands at ₹1,179, while the 52-week low is ₹593.30. The stock has seen a significant increase of 75.5% in the last year, outperforming its peers such as Bajaj Auto Ltd., which has given a 116.7% return in the same period.
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Several factors have contributed to the recent surge in Tata Motors’ share price:
- Strong financial performance: The company’s annual revenue growth of 26.61% has outperformed its 3-year compound annual growth rate (CAGR) of 20.47%.
- Improved ROE: Tata Motors delivered an ROE of 36.97% in the year ending March 31, 2024, outperforming its 5-year average of -1.07%.
- Positive market sentiment: The formation of a White Spinning Top candlestick pattern on the stock chart has instilled confidence among investors.
- Increasing institutional holding: Mutual funds have increased their holdings in Tata Motors from 10.37% to 10.50% in the March 2024 quarter.
Upcoming Catalysts
Tata Motors is expected to benefit from several upcoming catalysts:
- Launch of Tata Nexon CNG: The company is set to launch the Nexon CNG in the coming months, which is expected to boost sales and market share in the compact SUV segment.
- Expansion of electric vehicle (EV) portfolio: Tata Motors has achieved a 5-star rating for its EVs, which is likely to attract more customers and increase market penetration.
- Improving macroeconomic conditions: The Indian economy is expected to grow at a faster pace in the coming years, which could positively impact the automotive industry and Tata Motors’ performance.
Note: This article is written for educational purposes, Local Haryana does not provide buying and selling of any kind of stock
