Moneycontrol PRO
UPCOMING EVENT:Attend Traders Carnival Live. 3 days 12 sessions at Rs.1599/-, exclusive for Moneycontrol Pro subscribers. Register now!

Buy Tata Motors: target of Rs 610: Sharekhan

Sharekhan is bullish on Tata Motors has recommended buy rating on the stock with a target price of Rs 610 in its research report dated October 13, 2021.

October 14, 2021 / 01:48 PM IST
HDFC Securities research report's outlook and valuations:  500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."" title="HDFC Securities research report's outlook and valuations:  "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."" width="100%" height="auto" >

HDFC Securities research report's outlook and valuations:  "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Sharekhan's research report on Tata Motors


PE investors, TPG and ADQ, are investing USD 1 billion (~Rs 7,500) in the EV subsidiary of Tata Motors Limited (TAMO) for a stake of 11-15%; valuation of EV business pegged at USD6.7-9.1 billion. TAMO’s Focus on EV business and support from Government and Tata Group companies to increase faster adoption of EVs in India with dominant market share. TAMO to become earnings’ positive in FY2022E and a 64.8% y-o-y PAT growth in FY2023E, driven by a 16.7% revenue CAGR during FY2021E-FY2023E and a 120 bps improvement in EBITDA margin to 13.4% in FY23E from 12.2% in FY21.



Outlook


We maintain a Buy rating on TAMO with increased our SOTP based target price to Rs 610, driven largely by value unlocking of the EV subsidiary business. The stock trades at P/E multiple of 17.5x and EV/EBITDA multiple of 5.3x its FY2023E estimates.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Oct 14, 2021 01:48 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark