Tata Motors shares rally 5% to hit record high as Nomura upgrades to 'buy'

In the past month, Tata Motors share price has rallied 13 percent.

Shares of Tata Motors Limited surged over 5 percent to scale a fresh record high of Rs 1,084 after international brokerage Nomura upgraded the stock with a 'buy' recommendation, as it sees multiple levers of growth.

The analysts have assigned a target price of Rs 1,294. This implies an upside potential of 26 percent from the current market levels. In the past month, the shares of the company have rallied 13 percent.

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It said that potential significant upsides from Jaguar Land Rover's (JLR) execution and the demerger of commercial vehicles (CVs) from the passenger vehicle (PV) are value-unlocking catalysts.

Nomura estimates that the margin of India's largest EV player is projected 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, led by the phase-out of Jaguar's internal combustion engines (ICE) and the success of new EVs. Furthermore, net debt of Rs 1,600 crore (Rs 44 per share) in FY24 is expected to turn into net cash of Rs 57 and Rs 140 per share by FY26 and 27.

"Industry PV and EV demand has shown signs of weakness. But, launches of Curvv (scheduled on August 8) and Harrier EV in FY25 should support volumes," the brokerage said in a recent note on the company.

At about 11 am, shares of the company were trading at Rs 1,082, up 5.2 percent from the last close on the NSE.

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