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Tata Motors is the largest automaker in India and a prominent automobile firm in the world. It has a strong presence in commercial vehicles and is one of the Top 3 in passenger vehicles in India. As the world’s 4th largest manufacturer of trucks, and the 2nd largest of buses, Tata Motors range of products also includes passenger vehicles, utility vehicles, trucks, buses and defense vehicles.
The company’s presence on the stock market shows its significance in a strategic perspective which makes it attractive to investors. The focus of this article is to look into the history of the share price of the Corporation, its movements on the market, as well as future predictions regarding the target share prices.
As of writing this report, Tata Motors Limited (TATAMOTORS.NS) is trading at Rs 882.25, reflecting a decrease of Rs 21.05 or 2.33%. The company has a market capitalization of Rs 3.628 trillion. This shows the massive influence it has in the automotive industry. With a PE ratio of 10.03 and an earnings-per-share (EPS) of Rs 88.01 (trailing twelve months), Tata Motors continues to show financial strength. Next earnings date is set for November 8th 2024.
Further insights are Rs 3.00 forward dividend with a yield of 0.33%, and the recent dividend is ex dividend 11 June 2024. Also, the stock Tata Motors has a beta of 1.68 which depicts a higher volatility than the general market.
Tata Motors made certain decisions to ensure the welfare of Tata Motors during and after the eclipse with many short-term countries. Therefore, the main focus is on working together on an action plan and also as a team to implement the strategy that will make Tata Motors fully and substantially available.
Market Cap: Rs 3.72 trillion signifies the firm's growth and market presence giving it a global space
Enterprise Value (EV): Rs 4.26 trillion, which debt forms total company value and the tonne of this is expected to be more than its market share. This depicts debt/emphasis within the company.
Trailing P/E Ratio: 10.26, a relatively lower figure suggesting poor earnings and thus in the past the stock is under recording perhaps providing value opportunities
Price/Sales (P/S): 0.68, which shows that less than one rupee is being paid for every unit worth a rupee made so it is excess that would stock appreciation
Price/Book (P/B): 4.46, which you may have noticed the book value easily exceeds; this depicts optimism from stock but probably that this stock is rather expensive to such assets.
Enterprise Value/Revenue: 0.97, would however to be close to one, demonstrating that the volume-starved enterprise shares the true unit volume of the economy making it efficient revenue generation relativity of its total value.
Enterprise Value/EBITDA: 6.21, what means that the company’s earnings before interests, taxes, depreciation and amortization are providing good rates of returns while taking debt and the entire sustainable enterprise value into account.
Tata Motors' financial performance for the fiscal year ending March 31st, 2024, and its most recent quarter (ending June 30th, 2024) show its solid profitability and growth potential.
Profit Margin: 7.61%, indicating that for every Rs 100 in revenue, Tata Motors retains Rs 7.61 in profit after all expenses.
Operating Margin (ttm): 9.73%. This reflects the company operational efficiency in generating profit from its core operations.
Management effectiveness: Though the Return on Assets ROA and Return on Equity ROE values are missing, the profitability margins and the earnings growth testify that management is actively utilizing its strategies in a competitive market.
Revenue (ttm): Rs 4.44 trillion, significant amount that further shows the scale of sales of Tata Motors making it one of the leader in the market in India as well as abroad.
Revenue Per Share (ttm): Rs 1,157.91, which highlights the capacity of earning as per the share.
Quarterly Revenue Growth (YoY): 5.70%, despite the global economic slowdown, there has been consistent increase in sales year-over-year.
EBITDA: Rs 511.05 billion, strongly supporting the earnings before interest, tax and depreciation, showing strong capacity for cash generation by the firm.
Net Income (ttm): Rs 337.62 billion, this is quite a number, illustrates the net profits the company has made.
Diluted EPS (ttm): Rs 88.01, providing an excellent gauge of profitability on a per-share basis.
Quarterly Earnings Growth (YoY): 73.80%, a big increase in earnings, evidencing strong recovery and earning potential of Tata Motors.
Total Cash (mrq): Rs 592.17 billion, the company is now in a strong cash position which increases its capacity to settle short term debts and expand by investing.
As for the Total Debt (as of the most recent quarter): This figure is quite high, Rs 1.12 trillion, meaning the debt level is high and it should be closely monitored for the financial risk that it could pose to the company.
Total Debt/Equity (as of the most recent quarter): 117.15%, somewhat higher owing to leverage and indicating potential financial risk but also aggressive strategies of growth.
Book Value Per Share (as of the most recent quarter): Rs 221.59, which helps ascertain the value of the company on a per-share basis using the balance sheet as the basis.
Below is the trailing total returns earned by Tata Motors and S&P BSE Sensex, the market index that TATA Motors is benchmarked against. This is as of 22nd October 2024.
Tata Motors: +13.75%
S&P BSE Sensex: +12.09%
Tata Motors: +33.77%
S&P BSE Sensex: +23.82%
This is respectable. Tata Motors clearly registered a considerably higher return than the sensex and hence performed well over the past year.
Tata Motors: +75.19%
S&P BSE Sensex: +32.92%
Trailing the benchmark quite comfortably, Tata Motors’ return has more than doubled the index over the last three years. It has shown strong and consistent return performance.
Tata Motors: +550.31%
S&P BSE Sensex: +106.06%
Tata Motors has outperformed the Sensex returns by more than 550% in a five year period, indicating the company’s continued growth orientation.
The same returns highlight the substantial gains achieved by Tata Motors when compared with S&P BSE Sensex over various time periods which makes it a viable option for both short term and long term investors.
In this context, Tata Motors is assessed together with prominent competitors such as Bajaj Auto, Mahindra & Mahindra (M&M), Hero MotoCorp and Ola Electric. Leading the sector is Tata Motors with a market capitalization of Rs 3.652 trillion which indicates its wide coverage in commercial and passenger vehicles. Nevertheless, on this date, the company’s stock fell by 1.73% suggesting short-term fluctuations expected.
On the other hand, both Bajaj Auto and Ola Electric increased in price to register a gain of 0.48% and 1.16% respectively which indicates resilience to such inflation. M&M and Hero MotoCorp, like the broader market, showed minor losses. In the sphere where Tata Motors operates, the company encounters both matured and upcoming rivalry, particularly from the likes of Ola Electric in the EV market which will necessitate the company’s agility to paraphrase a lead.
At the moment, Tata Motors shares have been able to command a strong support area, which will be crucial in establishing their next price direction. Following the peak level of Rs 1,179 recorded on July 30, 2024, the stock has been in a downtrend gradually trading lower to the present price. This support region presents an opportunity for a bounce, provided that buyers come into the market at these zones.
Bullish Case (Rebound): In a situation where the stock forms a base at the ongoing price level, it can start a recovery phase. The reasonable limit in such a situation would be a retest of the recently attained all-time high price of Rs 1,179, which is a strong level of resistance.
Bearish Case (Breakdown): On the contrary, if this stock does not hold this level (horizontal support level and ascending trendline), it may move downwards from here. In this instance, the next crucial point is the lowest ascending trendline which should act as the next support level. If this trendline gets broken, it can be a sign of further weakness in the stock.
Tata Motors’ leadership is evident from its attractive financials and considerable market share in India’s automotive industry. The company has a healthy profitability profile, has a good market capitalization and has a history of beating the S&P BSE Sensex index. Tata Motors has been in a bearish trend since July 2024 high Rs 1,179 but is quite close to a strong support level. This level could decide the next move for the company.
High debt levels would need to be kept under close observation. Some of the key valuation ratios and financial metrics speak of a strong base. Tata Motors stands on firm ground in terms of competitive position but the entry of new players like Ola Electric will present challenges in the electric vehicle market. Investors need to pay attention to technical levels as it would indicate whether the stock would bounce back towards its all-time high or further fall. In conclusion, Tata Motors remains a good long-term investment with strong fundamentals and room for more growth, notwithstanding the short-term global market turbulence.
