Tata group stocks mixed a day after Chandra's exit; check winners & losers

After shedding almost up to 5 per cent a day earlier, most Tata group stocks gained. Titan and Tata Investment Corporation remained the top laggards.

Tata group stocks traded in a narrow range on Thursday, August 13, with the majority eking out minute gains and only a handful trading with cuts, recovering from a knee-jerk reaction seen a day earlier following the announcement of Tata Sons chairman N Chandrasekaran's resignation.

 

Investors also assessed the impact of Chandra's exit on the Tata group stocks ahead of the end of his term in February next year. A Tata lifer, Chandra announced his decision to step down as Tata Sons chairman amid uncertainty over his reappointment as a director of Tata Sons following differences within the group. 

 

 

After shedding almost up to 5 per cent a day earlier, most Tata group stocks gained. Titan remained the top laggard as the jewellery maker's stock declined 1.6 per cent to ₹5,022.20 on the BSE. Tata Investment followed with a 1.1 per cent fall. At the same time, BSE barometer Sensex was down 0.2 per cent at 77,820.   Also Read | Outlook mixed for top Tata group companies

 

The most-valuable group stock, Tata Consultancy Services (TCS), extended its decline and shed another 0.7 per cent to ₹2,332.40 after a sharp 5 per cent plunge in yesterday's session. Tejas Networks, Indian Hotels and Trent were among other stocks that traded with cuts. 

 

On the other hand, Tata Motors, which houses the commercial vehicle business, emerged as the top performer as investors hailed its earnings performance released last evening. The automaker's stock rallied 6 per cent to ₹485 on the BSE. 

 

The company posted an 83 per cent year-on-year (Y-o-Y) increase in its consolidated net profit to ₹2,560 crore for the quarter ended June. Revenue from operations also rose 19.3 per cent to ₹20,667 crore. Following a robust performance, better-than-expected Ebitda and amid expectations of improvement in margins led by price hikes, global brokerage Nomura upgraded the stock to 'buy' from 'neutral'. Its latest target price of ₹554 signals a 22 per cent upside from last close. 

 

Tata Motors PV shares also traded 0.5 per cent higher ahead of their Q1 results later in the day.   Also Read | 4 Tata group stocks jump over 1,000% under Chandra's term

 

Other stocks that gained included Tata Teleservices (up 4.45 per cent), Tata Technologies (up 1.4 per cent), and Nelco (1.3 per cent). Tata Steel, Tata Power, Tata Elxsi, Tata Chemicals and Orient Hotels also eked out up to 0.5 per cent gains. 

Yesterday’s reaction was largely a governance and succession risk response, which led to indiscriminate selling across several Tata names and therefore the rebound is understandable, said Harshal Dasani, business head at INVasset PMS. However, he added that it does not mean the uncertainty has disappeared.

 

"The healthier signal today is that the market has moved from blanket selling to stock-specific differentiation. That usually means the first layer of panic is fading. From here, the more durable rerating trigger would be clarity on succession, governance continuity and strategic direction at Tata Sons. Until that emerges, some dispersion within the group is likely to persist," according to him.

 

For long-term investors, the core listed Tata stocks look fundamentally intact, but near-term sentiment will track the August AGM and any clarity on strategy, listing, and succession, said Seema Srivastava, senior research analyst at SMC Global Securities.

 

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