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Rakesh Jhunjhunwala Portfolio:  Shares of Tata Motors rose on Thursday on the heels of strong gains for Chinese automobile manufacturers earlier in the day. Tata Motors Ltd is quoting at Rs 423.35, up 1.68 per cent on the day as on 12:49 IST on the NSE. The stock is up 38.19 per cent in the last one year as compared to a 2.35 per cent gain in NIFTY and a 15.66 per cent gain in the Nifty Bank index.

Share Price History

Tata Motors Ltd is up for a third straight session in a row. The stock is quoting at Rs 423.35, up 1.68 per cent on the day as of 12:49 IST on the NSE. The benchmark NIFTY is up around 0.68 per cent on the day, quoting at 16097.9. The Sensex is at 54103.21, up 0.66 per cent. Tata Motors Ltd has slipped around 2.82 per cent in the last one month.

Why is the Stock Rising?

Chinese automobile and auto ancillary stocks soared today after authorities in the country vowed to support auto consumption in the country going ahead. The Chinese auto industry faced several challenges in 2022 due to the unprecedented lockdowns in major parts of the country owing to a fresh Covid-19 outbreak and continued shortage of semiconductors.

The country’s State Council Information Office had earlier in the day underscored the importance of promoting sales of new-energy vehicles and extending the exemption of purchase tax on electric cars, a Bloomberg report said.

The improvement in the Chinese car market will be music to the ears of executives at Tata Motors’ subsidiary Jaguar Land Rover, given that a major chunk of the company’s sales come from China.

However, the continued shortage of semiconductors has been an impediment for JLR, given that it has hampered production and left the company unable to meet demands. While the management has indicated hope of an easing in shortage in the second half of 2022-23, the shortage is likely to drag in 2023.

Should You Invest?

ICICI Direct has a buy call on Tata Motors with a target price of Rs 500. The current market price of Tata Motors Ltd is Rs 411.7. The time period given by the analyst is one year when Tata Motors Ltd. price can reach the defined target.

Highlighting the strong fundamentals that may fuel Tata Motors’ share price, Punit Patni, Equity Research Analyst at Swastika Investmart said, “Tata Motors Ltd. is one of the biggest beneficiaries of the ICE to EV transition because of its first-mover advantage and synergistic benefits from other group companies. The company has witnessed a complete makeover post the change in management and has seen market share gains due to its phenomenal product offerings. The company has been able to capitalize on the trend of rising preference and awareness of customers towards safety and build quality; the new offerings have received rave reviews, especially in this aspect. Another point to note is that the easing down of semiconductor shortage augurs well for the JLR and EV segment.”

The stock market expert of Swastika Investmart went on to add that Tata Motors is poised to perform well in both the Indian and global markets and the company’s free cash flows will help the company to achieve its deleveraging targets.

Rakesh Jhunjhunwala Shareholding in Tata Motors

According to Tata Motors shareholding pattern for January to March 2022 quarter, Big Bull Rakesh Jhunjhunwala owns 3,92,50,000 shares or 1.18 per cent stake in the company.

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