Tata Motors share, Should you buy or sell it

 Tata Motors Company Business model:

Tata Motor is one such brand which is most liked in India. Tata Motors cars are always known for the same quality and solid body. Tata Motors is a champion in commercial vehicles in each segment. Also the company is leading in passenger vehicles with most demanding products in the compact, midsize car and utility vehicle car segments. Tata Motors is the global fourth largest truck manufacturer company in the commercial vehicle segment. Kapambay is also strong grip bus manufacturer segment & become the world`s second largest bus manufacturer. Tata Motors has different product range o in the different segments of vehicles. Tata Motors has famous brands in Passenger Cars like Indica V2, indica V2 Turbo, Indica Vista, Indica V2 Xeta, Indigo Marina Indigo CS.Nano., Indica V2 Dicor.Indigo XL, Indigo, Fiat Cars.

The company also has good portfolio of products in the Utility Vehicles which includes world famous brands like Safari Dicor.Sumo Grande.Sumo.Xenon XT.Trucks:Medium & Heavy Comm. Vehicles, Tata Novus.In the commercial vehicle segment the company has Intermediate Commercial Vehicles, Light Commercial Vehicles, TL 44, and Small Commercial Vehicles. Also company has some business in Carriers segment which includes Buses.Winger.Magic,Defence Vehicles.

 

                                                                                                           Image-source-tatamotors-website

Tata Motor Company financial results expectations:

Tata motors company local business has show good improvement due to launching of  new products and more announcements on the  electric vehicles Segment.  Global shortage of semi-conductor chips may have negative impact on  the volume of Jaguar Land Rover (JLR) which may hit company bottom line.

As per the expectations, onstandalone basis we may see jump of 48% YOY basis & if we will talk about the average standalone then we may see 15% to 18% improvement Year on Year basis.

With these expectations we may see jump in standalone revenues by 82% but Volume of the company may see decline of more than 18%

If we will try to find out the results on consolidation basis then we may expect 10% to 12% Improvement on yearly basis.  

Previously company had reported consolidated revenues of nearly Rs 53,500 crore . Also Company had reported net loss of nearly  Rs 314crore in the same period last year. If we will analysis then Company  consolidated revenues still stood around  Rs 66,400 crore with calculated   net loss of Rs nearly4,449 crore in the previous quarter of this financial year.

In the Automobile sector, Companies managements are not looking much confident because covid impact had made big drop in their sale. People don’t want to spend much money on automobile or for buying new vehicles but Automobile sector will surely show good growth in the coming yearsTata motors company may report 6% increase in the sale YOY basis.

Tata Motors share Valuations:  Should you buy Tata Motors share?

Tata motors share is trading around 482.50rs (11:40 am, 1-november-2021). With the face value of 2rs each . Tata motors share is trading with 2.8 price to book value & made 52 week high of 530rs & 52 week low of 130rs with the market cap of 160,680 crore. Tata motors earning per share is still negative with (-28.40).  Company had reports sales of 31.980 in the june 2020 which increased in the June 2021 & reached at the level of 66,406. Tata Motors had reported net loss of (-8384 cr) in the June 2020 which had showed improvement in the June 2021 and reports around (-4310cr). There is huge debit on the books of the company nearly 19,000 crore which has increased nearly 6 times in the last 4 years. If we will analysis all these valuation of the company then Tata Motors share is only trading at its brand valuations otherwise at the price of 482rs, it looks highly overvalued.

What are the Short term price targets of Tata Motors share?

Tata Motors share Buy(If)

Tata motors share is trading at 482.50rs, If we will check the technical charts then Tata motors share is in uptrend But Tata motors share had seen profit booking from the higher levels of 530rs. Tata motors share has strong support levels of 468rs to 465rs & this price also will also work as a Stoploss on closing basis for short term trade of tata motors. If stock of tata motors able to sustain above 465rs levels in the company days then we may see trice targets of 490rs, 495rs, 500, 508, 517rs, 522rs, & we may see new 52 weeks high if Tata motor share gives close above 535rs price levels in the coming days or week then price targets in tata motor share will be open & it may create new 52 weeks highs in the company days but It need to give close as suggested price levels.

Should you hold or sell Tata Motors share?

Tata motors share sell (If)

If Share price of tata motors will not able to trade above 465rs of 470rs levels then We may see downfall in the tata motors share price which can take tata motor share price up to 450rs, 440rs, 430rs, 422rs, 415rs, If break 414.50rs price levels then we may see more selling in Tata motors share price and share price of tata motors may reach up to the levels of 405rs, 395rs, 388rs, 382rs, 373.50rs, 367.50rs, 362.10rs to 350rs levels in the coming weeks. But for meeting these levels Tata motors stock has to give closing below 465rs price levels

Note: All price targets is on the basis of technical charts please keep strict stoploss and wait for the price levels for enter in or out from the tata motors stock.

Should you buy Tata Motors share for the long term?

Tata motors are a good company for the long term investors. Share price of the tata moros has given multibagger returns since March 2020 low of nearly 62.50rs. Indian stock market has already given huge run up in the last 1.8 years. Long term investors should also stay alert in the stock market for making new investment. If Indian stock market will go down then most the large cap and midcap stocks will show more downside. It is better to buy Tata motors share at the lower levels.

Long term investors should keep Tata motor share with the stoploss of 418rs on closing basis which is far away from current price of tata motors share of 482rs.

Tata motors share is a portfolio share but company has also higher debit on the books. We have to see how company reduce the debit from company books. It is better to buy on lower levels or follow the price targets and stolosses which discussed above.