Rakesh Jhunjhunwala portfolio stock Tata Motors may rally 26 % from the last close on the improvement in semiconductor availability, Motilal Oswal Financial Services said in a report. The brokerage firm has maintained ‘buy’ rating on stock, with target price pegged at ₹530, a 26% upside potential. The stock outperformed BSE Sensex, gaining 5.17% in one month, and 43% in the last one year. The 30-share index added 3.5% in one month and 20.4% in the last one year.
“The management saw a gradual improvement in semiconductor supplies, leading to improved production and wholesale volumes as compared to 3QFY22. The same is expected to continue in FY23,” the research and brokerage firm said.
Ace investor Rakesh Jhunjhunwala owns a 1.18% stake or 3.92 crore equity shares of Tata Motors, according to the shareholding data available on the bourses. Often called the big bull, Rakesh Jhunjhunwala increased his stake in the company between the July-September quarter and the October-December quarter, buying 25 lakh shares. He had purchased the stock in 2020 when the scrip had tanked owing to the Covid-19 pandemic. It may be noted that the shareholding pattern for January-March quarter is yet to be filed.
Analysts at Motilal Oswal said all three businesses of Tata Motors are in recovery mode. While the India CV business will see a cyclical recovery, the India PV business is in a structural recovery mode. JLR is witnessing a cyclical recovery, supported by a favorable product mix, the brokerage firm added.
“However, supply-side issues will defer the recovery process. While there are no near-term catalysts from the JLR business, the India business (~50% of SoTP) will see a continued recovery,” it added.