Tata Group Stock: After the second quarter results of Tata Group's leading auto company Tata Motors, brokerage houses have released an investment strategy on the stock. Brokerage firm Sharekhan has maintained a buy recommendation on Tata Motors. At the same time, Nuwama has given a REDUCE rating on the leading auto stock. At the same time, Motilal Oswal has given a neutral opinion on Tata Motors. During the July-September quarter (Q2FY25), both the company's profit and income declined. The brokerage believes that revival can be seen in the second half.

Tata Motors: What is the target

Brokerage firm Sharekhan has maintained a buy recommendation on Tata Motors. Also, the target price per share has been reduced to Rs 1,099. The stock closed at 806 on November 8, 2024. The brokerage says that the second quarter was slow for the company. But revival may come in the second half of the current financial year (H2FY2025).

According to the brokerage report, JLR has maintained its full-year guidance despite a sluggish performance in the second quarter. In the near term, the domestic business may remain in line with industry trends. The company's commercial business has maintained its double-digit EBITDA margin. The stock remains buy-advised given the prospects of a reduction in net debt along with expectations of continued improvement in JLR, passenger vehicles (PV), and commercial vehicles (CV) business.

Brokerage firm Nuvama has given a 'REDUCE' rating on Tata Motors. The target price per share has been reduced from Rs 1010 to Rs 767 per share. The brokerage says that the second quarter results have been weak. The company's EBITDA has declined by 15% (YoY), which is 22 percent below our estimate. Weakness in revenue and high discounts and marketing expenses in JLR had an impact on operating profit. Flat growth is expected in Indian commercial sales. This is because the sales of commercial vehicles may be affected due to slowing infrastructure expenditure and increased competition from railways. In such a situation, the demand outlook looks weak.

The brokerage firm (Motilal Oswal) has given a neutral rating on Tata Motors. Along with this, the target price per share is Rs 840. The brokerage says that there are still challenges ahead for JLR. Margin pressure can be seen. Despite weak volumes, the Indian business remains better. The company's performance was strong in all segments in FY24. Given the weakness in the JLR business, the brokerage has reduced the EBITDA estimate for Tata Motors by 3%/7% for FY25/FY26. The stock is trading at 15x FY25E/FY26E consolidated EPS and 6.5x/5.5x EV/EBITDA.

Tata Motors: How were the Q2 results

Tata Motors informed the stock exchange that the company's consolidated net profit declined by 9.9 percent to Rs 3,450 crore in the second quarter of FY 2025. The company's profit was Rs 3,832 crore in the same quarter of the previous financial year. The consolidated operating income of the company stood at Rs 1,00,534 crore, as against Rs 1,04,444 crore in the same quarter last year. The total expenditure stood at Rs 97,330 crore, as against Rs 1,00,649 crore in the same period last year.

The company's operating profit (EBITDA) fell by 11.4 percent to Rs 11.6 thousand crore. Tata Motors' JLR's income declined by 5.6 percent in the second quarter and came down to 648 crore pounds (YoY).

Tata Motors: Shares rise

Despite the weak results, Tata Motors stock had a flat start on Monday (11 November). But in a short time, the stock jumped by about 2.5 percent. On Friday, the stock closed at Rs 806. So far in 2024, Tata Motors stock has climbed by about 4.4%. In the last six months, Tata Motors' stock has fallen by about 21%. Tata Motors stock has given more than 25 percent return in a year. The company's 52-week high on BSE is Rs 1,179, 52-week low is Rs 644.