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TATAMOTORS Share Buyback | New Levels | Target Price | Complete Stock Analysis | Rally Continue ?

Updated: May 15


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TATAMOTORS

Part 1 - Fundamental Analysis


Introduction


With over 8.5 million Tata branded vehicles plying globally, they offer a wide spectrum of vehicles that are customised for local conditions and meet the highest standards for quality, safety, environment norms and user comfort. They have been expanding their international footprints through exports since 1961. Today, Tata Motors is present in over 125 countries, with a worldwide network comprising over 8,400 touch points. With vast global experience, the company brings deep understanding of customer expectations from diverse markets, and is well positioned to cater to ever changing automotive norms and consumer trends across the globe.


Tata Motors Ltd is India`s largest automobile company. They are the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world`s fourth largest truck manufacturer, and the world`s second largest bus manufacturer. The product range of the company includes,

  • Passenger Cars

Tiago, Tigor, Altroz, etc.

  • Utility Vehicles

Safari Dicor, Xenon XT, Harrier, etc.

  • Trucks

Medium & Heavy Comm. Vehicles, Tata Novus. Intermediate Comm. Vehicles. Light Commercial Vehicles, TL 44, Small Commercial Vehicles.

  • Commercial Passenger Carriers

Buses, Winger, Magic, Defence Vehicles.


Strengths


Weaknesses


Opportunities


In 2019, India was the fifth-largest auto market, with ~3.81 million units combined sold in the passenger and commercial vehicles categories. It was the seventh largest manufacturer of commercial vehicles in 2019.


The two wheelers segment dominate the market in terms of volume owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided the growth of the sector.


India is also a prominent auto exporter and has strong export growth expectations for the near future. In addition, several initiatives by the Government of India and major automobile players in the Indian market is expected to make India a leader in the two-wheeler and four-wheeler market in the world by 2020.


Domestic automobiles production increased at 2.36% CAGR between FY16-20 with 26.36 million vehicles being manufactured in the country in FY20. Overall, domestic automobiles sales increased at 1.29% CAGR between FY16-FY20 with 21.55 million vehicles being sold in FY20.


Passenger vehicle (PV) sales stood at 310,294 units in October 2020, compared with 271,737 units in October 2019, registering a 14.19% growth. As per Federation of Automobile Dealers Associations (FADA), PV sales in December 2020 stood at 271,249 units, compared with 218,775 units in December 2019, registering a 23.99% growth.


Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94% during FY16-FY20. Two wheelers made up 73.9% of the vehicles exported, followed by passenger vehicles at 14.2%, three wheelers at 10.5% and commercial vehicles at 1.3%.


EV sales, excluding E-rickshaws, in India witnessed a growth of 20% and reached 1.56 lakh units in FY20 driven by two wheelers. According to NITI Aayog and Rocky Mountain Institute (RMI) India's EV finance industry is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) in 2030.


In order to keep up with the growing demand, several auto makers have started investing heavily in various segments of the industry during the last few months. The industry has attracted Foreign Direct Investment (FDI) worth US$ 24.62 billion between April 2000 and September 2020, according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).


The automobile industry is supported by various factors such as availability of skilled labor at low cost, robust R&D centers, and low-cost steel production. The industry also provides great opportunities for investment and direct and indirect employment to skilled and unskilled labor.


Indian automotive industry (including component manufacturing) is expected to reach Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026.


The Indian auto industry is expected to record strong growth in 2021-22, post recovering from effects of COVID-19 pandemic. Electric vehicles, especially two-wheelers, are likely to witness positive sales in 2021-22.


Key Positions of Tata Motors Limited


Management

  • Chairman Emeritus

Ratan N Tata, India’s business icon serves at the Chairman Emeritus position of Tata Motors.

  • Chairman & Non-Exe Director

N Chandrasekaran, serves as the Chairman & Non-Exe Director of Tata Motors.

  • Managing Director & CEO

Guenter Butschek, leads the position Managing Director & CEO for Tata Motors.


Shareholding Pattern as on 31st December, 2020

Tata Motors Shareholding Pattern | Tata Motors Shareholding | Tata Motors Stock Complete Analysis
TATAMOTORS - Shareholding Pattern

Returns on Share


52 Week Higher Level: 357.00 INR


52 Week Lower Level: 79.60 INR


Peers


Eicher Motors, TML-D, etc.


Part 2 – Technical Analysis


TATAMOTORS | Tata Motors Share | Tata Motors Technical Analysis | Tata Motors Technical Chart | Tata Motors Complete Analysis | Tata Motors Stock Complete Analysis
TATAMOTORS Daily Chart

The above image shows the Daily chart of TATAMOTORS along with 5, 13 and 26 Days Exponential Moving Averages (EMA), Moving Averages Convergence-Divergence (MACD), Relative Strength Index (RSI), Bollinger Bands (BB) and Volume.


On 2nd March, 2021 the stock gave breakout with good volumes but found unable to sustain at the levels and since a sideways trend in seen in the stock.


Since 02nd March, 2021 it has tested its support at 290 levels four times. Currently 290 is acting as a support level for the stock.


On 12th May, 2021 the stock tried to break its resistance level at 335 and give breakout with good volumes, unfortunately the bears in the market resisted it from doing so and on the next trading an average selling pressure is seen in the stock.


Currently, 335 and 290 levels are acting as resistance and support levels for the stock.


Indicators


1. 5, 13 and 26 Days Exponential Moving Averages (EMA)

On 07th May, 2021 5 DEMA has able to cut 13 & 26 DEMA from below since then an up move is being seen in the stock price.


2. Moving Averages Convergence-Divergence (MACD)

MACD which is considered as a leading indicator, has also crossed the Signal line from below, MACD is also in favor of the stock, since 06th May, 2021.


3. Bollinger Bands (BB)

In last few days, the stock is moving with upper Bollinger Band, which signals as there could correction be seen in upcoming days and as of 14th May, 2021 it is seen. It’s good for shorting opportunities while to buy for medium as well as long term, waiting for some period could turn out profitable.


4. Relative Strength Index (RSI)

The RSI of TATAMOTORS stock is roughly around 55.71, which signals the stock is in a sideways zone. Waiting for couple of days for medium term investors will be well. While shorting opportunities would be available.


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Sources


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