Rakesh Jhunjhunwala Trims Stake in This Tata Group Company; Do you Own?

Rakesh Jhunjhunwala Portfolio: Indian ace investor Rakesh Jhunjhunwala has cut his stake in Tata Motors as per the recent shareholding pattern. Known as the ‘Big Bull‘ and the ‘Warren Buffet of India’, Rakesh Jhunjhunwala’s portfolio and investments are closely watched by the stock market participants as he has created enormous wealth over the past years from his stock market bets and strategies .


Rakesh Junjhunwala’s Stake in Tata Motors

According to the data available on the BSE, Rakesh Jhunjhunwala has 1.09 per cent stake or 3,62,50,000 shares in Tata Motors as of June 2022, which is down from 1.18 per cent stake he held in the previous quarter of March 2022.

Tata Motors Share Price History

Tata Motors shares are up 45 per cent in a year’s period, however, the auto stock has declined more than 10 per cent in 2022 (YTD) so far as compared to about 8 per cent fall in benchmark Sensex. During the April-June quarter, the stock fell 4.85 per cent and now trades at Rs 450 per share. The auto giant’s stock has been trading weak since October 2021, in line with the headline indices.

What do Analysts Say?

While Tata Motors is expected to report strong growth in domestic business in the April-June quarter earnings, analysts at Motilal Oswal said that Jaguar Land Rover volumes have declined on-year basis due to chip shortages. “We estimate near EBIT breakeven supported by mix,” they added. However, the brokerage firm still remains bullish on Tata Motors with a target price of Rs 490 per share.

Prabhudas Lilladher is also bullish on the stock. “We maintain our positive stance on Tata Motors as the PV segment will likely gain further market share led by revamped portfolio, customer preference for SUVs and rising EV penetration, CV volumes will continue to benefit from the cyclical upturn, improving fleet utilization and freight rates, and revival in JLR and strong order book to benefit and drive FCF generation,” they added. The brokerage firm has a target price of Rs 555 per share on Tata Motors’ stock.

HSBC Global Research, in its report, said: “Semiconductor supply is likely to improve every month from now on and with the new Range Rover (RR) getting a positive response and volume outlook from 2Q remaining buoyant. Improvement in volumes can have a disproportionate positive impact on cash flows and hence debt reduction.

“Going forward, car makers expect supply chain constraints to ease and car sales to pick up in 2H CY22. JLR’s market share has fallen across markets as supply shortage continued to impact JLR more than peers, as expected, in 1Q. Positively, pricing across the board remains very strong and JLR in particular has negligible discounting and product mix improvement. We lower FY23e/FY24e JLR volume estimates by 20 per cent/8 per cent. Our overall EPS cut for FY23e is exaggerated due to the negative impact of operating leverage. Maintain Buy with revised TP Rs 560 (Rs 570 earlier),” it added.

Tata Motors’ commercial vehicle and passenger vehicle business are seeing strong momentum. In June, commercial vehicle and passenger vehicle wholesale volumes rose sequentially by about 14 per cent and 4 per cent respectively. However, Q1FY23 commercial vehicle volumes declined by 16 per cent sequentially while passenger vehicle volumes rose by about 6 per cent. Also, as electric cars are seen to be the future of the auto industry, Tata Motors has doubled down on its investments in the segment.

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