Tata Motors DVR hits over 4-year high; stock surges 53% in one month

Tata Motors DVR surged 9% to Rs 292.70, its highest level since June 2017

Shares of Tata Motors DVR hit an over four-year high of Rs 292.70 after they surged 9 per cent on the BSE in the intra-day trade on Tuesday, on the back of heavy volumes. The stock of the Tata Group Company surpassed its previous high of Rs 284, touched on October 19, 2021 and was trading at its highest level since June 2017. The stock had hit a record high of Rs 387 on September 12, 2014.

Differential Voting Rights (DVR) shares are shares that are permitted to be issued with differential voting and differential dividend rights.

In the past one month, the DVRs of Tata Group commercial vehicle manufacturer have rallied 53 per cent. In comparison, the S&P BSE Sensex was up 0.63 per cent during the same period. Trading volumes on the counter nearly doubled today with a combined 11.62 million equity shares changing hands on the NSE and BSE till 01:07 pm.

On October 12, 2021, Tata Motors (TML) had announced it will raise Rs 7,500 crore ($1 billion) in its passenger electric vehicle (EV) business from TPG Rise Climate at a valuation of up to $9.1 billion. "TML and TPG Rise Climate have entered into a binding agreement whereby TPG Rise Climate along with its co-investor ADQ, shall invest in a subsidiary of Tata Motors that will be newly incorporated," Tata Motors had said in a statement.

Meanwhile, ace investor Rakesh Jhujhunwala bought 10 million equity shares, or 1.97 per cent, additional stake in Tata Motors DVR in July-September (Q2FY22), increasing his stake in the company to 3.93 per cent in Q2 from 1.97 per cent at the end of June quarter (Q1), according to the shareholding pattern filed by the company.

Separately, shares of Tata Motors were up 4 per cent at Rs 520.5 on the BSE in the intra-day trade today. It had hit a 52-week high of Rs 532.40 on October 14, 2021. Trading volumes on the counter more-than-doubled with a combined 42.75 million equity shares changing hands on the NSE and BSE. TML is an auto OEM from the house of Tatas, operating in domestic (PV, CV) as well as global markets (Jaguar Land Rover i.e. JLR).

ICICI Securities has a 'buy' rating on Tata Motors with 12 month price target of Rs 600 per share. The brokerage firm expects healthy 24 per cent revenue CAGR over FY21-23E backed by 22.2 per cent volume CAGR (albeit on a low base).

"Cost control, efficiency improvement-led FCF generation targets for ongoing deleveraging push (FY21 net automotive debt at around Rs 41,000 crore). Continued EV alertness in India (PV market leader with Nexon; plans to introduce 10 models by 2025) and JLR (Jaguar all-electric by 2025; six BEVs in Land Rover in the next five years), are among key triggers for future price performance," the brokerage firm said.