In 2017, Motilal Oswal, a leading broking firm, came up with a research report on several mid-cap and large-cap stocks, including Tata Motors. The report suggested that the broking firm was quite bullish on the Tata Motors stock and had full confidence that the share price would show good momentum in the upcoming year. Let’s take a closer look at why Motilal Oswal was so bullish on Tata Motors.
About Motilal Oswal
Before delving into the reasons behind Motilal Oswal’s bullish stance on Tata Motors, let’s briefly discuss the firm. Motilal Oswal is a leading financial services company in India, providing a wide range of investment services, including equity and commodity broking, portfolio management, wealth management, and more. The firm has a strong reputation for its research and advisory services. Their recommendations are closely followed by investors in the Indian stock market.
Why is Tata Motors Bullish?
Motilal Oswal’s bullish stance on Tata Motors was based on several factors, but the primary reason was the company’s international business. Tata Motors owns two iconic brands. One is Jaguar and the other is Land Rover. With the launch of new products, the company started showing good results under these two brands. This was the biggest trigger for the company. Technical analysts believed that this will have a significant impact on the company’s revenue growth.
Tata Motors: An Overview
Tata Motors is one of the leading automobile manufacturers in India, and it operates in various segments, including passenger vehicles, commercial vehicles, and luxury vehicles. The company has a strong presence in the Indian market, and it is also expanding globally, especially in countries like the UK, the US, and China. Tata Motors owns several well-known brands, including Tata Nano, Tata Ace, Tata Sumo, Tata Indica, Jaguar, and Land Rover.
Factors Contributing to Tata Motors’ Growth
Apart from its international business, there were several other factors contributing to Tata Motors’ growth. Firstly, the company was likely to see an increase in volumes, with estimated volumes from FY17-FY19 being around 12%. Additionally, the company’s revenue growth was likely to be over and above 15%, which would further fuel the stock price’s upward momentum. Furthermore, forex rate hikes were likely to affect the company’s balance sheet on export sales. This can make Tata Motors one of the bull’s eye candidates for the coming days.
Tata Motors has been posting losses for the past few years due to various reasons. These include the economic slowdown, regulatory changes, and the high debt burden. However, the company has been taking several measures to turn around its business and become profitable. With the launch of new products, the company is expected to see an improvement in its financials in the coming years. However, the exact timeline for the company to become profitable is uncertain. It will mainly depend on several factors, including the economic conditions and the company’s ability to execute its plans.
Tata Motors can be a good stock to buy for investors looking for long-term growth. The company has several strong brands, a growing international business, and a strong presence in the Indian market. However, as with any investment, there are risks involved. Hence, investors should do their due diligence before investing in the stock. Additionally, investors should keep in mind that stock prices can be volatile. Therefore, they should be prepared to hold onto their investments for the long term to reap the benefits of the company’s growth.
The exact amount of how much Tata Motors’ share price can go up is difficult to predict. However, with the positive outlook and growth potential, as suggested by Motilal Oswal’s research report, there is a good chance that the share price will see an upward trend. It is important to note that the stock market is unpredictable, and there can be several external factors that can affect the share price, including changes in the economy, regulatory changes, and global events. Therefore, investors should be cautious and do their research before making any investment decisions.
In conclusion, Motilal Oswal’s bullish stance on Tata Motors was primarily based on the company’s international business and growth potential. With the launch of new products and an expected increase in volumes, Tata Motors was expected to see a significant improvement in its financials. This would translate into a positive impact on the stock price. While Tata Motors can be a good long-term investment for investors looking for growth. It is also important to keep in mind that the stock market can be volatile, and there are always risks involved. Therefore, investors should do their due diligence and invest wisely.