(CTN News) – Nomura, a global broking firm, announced today that it has revised its rating for Tata Motors from “Neutral” to “Buy.”

The news caused Tata Motors shares to reach a new all-time high following the change. The company’s shares became more appealing to potential investors as a result of this modification. As a result, the pricing target for the company increased by 26% to Rs 1,294 from Rs 1,141 at the beginning of the process.

Tata Motors did this in order to maximize profits.

As per the findings of the financial firm Nomura, the performance of Jaguar Land Rover (JLR) has the potential to result in substantial profits for the stock of Tata Motors. This is the assessment that the company has made.

According to Tata Motors, the demerger plan that the company is considering executing in order to split its commercial vehicle (CV) and passenger vehicle (PV) divisions has the potential to unlock value for the CV component of the firm.

This is because the plan is intended to break the company into two distinct vehicles. The position of the broking indicates that the stock of Tata Motors increased by more than four percent, reaching an all-time high of Rs 1071 in the early trading session of today. Its stock has never before reached such a high level as it is right now.

This represents a substantial difference when compared to the previous closing price on the BSE, which was 1027.65 rupees.

Not only has the value of the multibagger scrip increased by 67% in just one year, but it has also increased by 137% in just two years. This growth in value has occurred in just one year.

During the trading session that took place on August 25, 2023, the shares of Tata Motors achieved its 52-week low price of Rs 593.50. This was the price at which it was trading.

Today on the Bombay Stock Exchange (BSE), there were approximately 4.87 lakh shares that were traded, which resulted in a transaction that was worth 51.37 crore rupees of currency.

The growth contributed to the company’s overall market value reaching 3.55 lakh crore rupees, which achieved this level.

It was determined by Nomura that the target multiple for JLR should be increased from 2.75 times to 3.5 times its Enterprise Value-to-EBITDA ratio. This was done because of the likelihood of good outcomes. The potential for positive outcomes was the driving force behind this growth in the number of situations.

EBIT margins at Tata Motors are projected to grow by 8.5% in 2025.

This represents an increase from the 7.8% margins that were achieved in the previous year. This increase is anticipated to continue, with the margins reaching 10.1% by the fiscal year 2027 and having the potential to go much higher, reaching 11–12% by fiscal year 2030. This would be a significant increase from the current level.

On August 1, the Tata Group is going to release a statement that will provide a comprehensive overview of the outcomes that the company achieved during the first quarter.

With the assistance of a tax credit that totalled 8,159 crore, the company was able to record a net profit of 17,407 crore for the period of time that ended in March 2024.

This was made possible by the fact that the tax credit was received. Tata Motors reported a net profit of 5,400 crore for the fourth quarter of the previous fiscal year, which was the 23rd fiscal year.

When compared to the revenue of Rs 1.05 lakh crore that was recorded during the third quarter of the fiscal year 2023–24, the revenue for the January–March quarter of the financial year 2023–24 increased by more than 14% to reach Rs 1.20 lakh crore. This represents a significant increase in comparison to the revenue that was generated during the three-month period.

EBITDA, which is an acronym that stands for earnings before interest, taxes, depreciation, and amortisation, climbed by 33% year-on-year, going from Rs 12,810 crore in the third quarter of fiscal year 23 to Rs 17,035 crore. When compared to the prior revenue level of Rs 12,810 crore, this marks a huge gain.

SOURCE: BTN