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Tata Motors climbs 5% as Edelweiss ups target price

Shares of Tata Motors spiked over 5 per cent in Wednesday’s afternoon trade after Edelweiss Securities upgraded the auto major to ‘Buy’ with a revised target price of Rs 245 (Rs 140 earlier).

The scrip traded 5.74 per cent up at Rs 186.20 at around 1.10 pm, while the benchmark BSE Sensex was up 290 points, or 0.71 per cent, at 41,256 around the same time.

Edelweiss said that Tata Motors (TML) has been recouping market share (steep fall in FY12-17) led by a series of corrective actions across products, platform, vendors and customers.

“We envisage TML’s efforts to yield sustainable profitability and cash flow. However, it hinges on macro demand recovery,” the brokerage house said.

The company on Tuesday rolled out the electric variant of its compact SUV Nexon for the personal segment at a starting price of Rs 13.99 lakh and said it plans to launch four more EVs in the next two years.

Edelweiss further added that the promoter’s sustained capital support indicates management’s long-term commitment to the business.

Post a tumultuous FY16-19, the domestic brokerage house expects Jaguar Land Rover (JLR) to generate free cash flow driven by rising share of profitable Land Rover, receding anti-dieselisation sentiments in EU (especially for Euro 6 engines, normalising volumes in China post the recent turmoil and a tight leash on cost and capex.

Shares of the company had declined nearly 70 per cent during the past three years. The scrip dipped to Rs 176 on January 28, 2020 from Rs 532.50 on January 30, 2017.

Source: Economic Times