Tata Motors share price falls 1% as Q1 net loss widens: should you buy, hold or sell?

Tata Motors share price fell over 1% in early trade on BSE on Thursday after the company reported losses. Consolidated net loss for the quarter ended June 2022 came at Rs 5,006.60 crore, widening from a loss of Rs 4,450.92 crore in the same quarter last year.

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Tata Motors shares recovered and were quoting at Rs 436.40, down 1.7% on NSE

Tata Motors share price fell over 3% on Thursday to hit an intraday low of Rs 427 on NSE in early trade after the company reported losses. Consolidated net loss for the quarter ended June 2022 came at Rs 5,006.60 crore, widening from a loss of Rs 4,450.92 crore in the same quarter last year. Company’s total revenue from operations, however, stood at Rs 71,934.66 crore, up 8.32% on-year. The Tata Group company’s EBITDA margin came in at 7.4% for the quarter, while the Ebit margin increased to -0.7%. Brokerages remain bullish on the stock despite the widening loss in the quarter under review, and see up to 19% upside going forward. Tata Motors shares recovered and were quoting at Rs 436.40, down 1.7% on NSE.

Stock talk: Should you buy, hold or sell Tata Motors shares?

Motilal Oswal: Buy
Target price: Rs 520; Upside: 17%

Tata Motors should witness a gradual recovery as supply-side issues ease (for JLR) and commodity headwinds stabilize (for the India business). The auto major will benefit from: a macro recovery, company-specific volume and margin drivers, and sharp improvement in FCF and leverage in both JLR as well as the India business, according to Motilal Oswal analysts. The stock currently trades at 16.8x FY24E consolidated P/E and 4.2x EV/EBITDA ratio. The brokerage maintained a ‘Buy’ rating on the stock with a target price of Rs 520 per share.

Edelweiss: Buy
Target price: Rs 514; Upside: 15.7%

Edelweiss Securities analysts believe that JLR Q1 performance is a classic case of a perfect storm. More importantly, a large part of the loss can be recouped with ramp up in production. Hence, the brokerage lowered its FY23E EBITDA by a mere 5%. “India and JLR have tailwinds of cyclical recovery and product-cycle. This should facilitate balance sheet improvement—a key driver of our BRAVEHEART call,” it said. It retained its ‘buy’ call on the stock with a SoTP-based target price of Rs 514, up from Rs 485 earlier.

Emkay Global: Buy
Target price: Rs 530; Upside: 19%

Emkay Global estimates FY22-24E India CV/PV volume CAGRs of 16%/28%, driven by continued upcycle in industry sales and better chip supplies. “The focus remains on E-PVs, with medium-term investments of US$2bn toward new products, capacity expansion, localization, and charging infrastructure,” the brokerage said. It reaffirmed its ‘buy’ rating on the stock with an SOTP-based target price of Rs 530, implying 19% upside from previous closing price.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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