Tata Motors has experienced a significant increase in its returns, reaching approximately 51 percent year-to-date. This remarkable performance can be attributed to multiple factors, including a positive outlook for Jaguar Land Rover (JLR), strong and resilient demand, and the anticipation surrounding the upcoming initial public offering (IPO) of Tata Technologies.

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Tata Motors has experienced a positive performance this year, with returns of approximately 51 percent. This success can be attributed to several factors, including the improving prospects for JLR (Jaguar Land Rover), steady demand for their vehicles, and the anticipation surrounding the upcoming IPO (Initial Public Offering) of Tata Technologies.

Adding to the positive outlook for Tata Motors, global research and broking firm CLSA has increased the target price for the company by almost 8 percent to Rs 690. This new target reflects a potential increase of over 20 percent from Tuesday’s closing price.

CLSA is optimistic about Tata Motors due to its strong execution, careful management of cash across its businesses, and a steady demand for commercial vehicles (CV) in the domestic market. According to CLSA’s report, Jaguar Land Rover (JLR) has been experiencing robust growth in retail volumes, and the EBIT (earnings before interest and taxes) margin for this segment is expected to reach 6 percent in the current fiscal year.

Taking these factors into account, CLSA has also raised its earnings estimates for Tata Motors by 11-18 percent for FY24-25. This increase is primarily driven by higher margins for JLR and the company’s CV business.

Motilal Oswal Financial Services, a brokerage firm, has selected Tata Motors as its top choice in the sector because of its strong position, which makes it a major beneficiary of the increasing demand for commercial vehicles.

As of 1:25 pm, Tata Motors’ shares were being traded at Rs 585.95 on the NSE, showing a 2.24 percent increase from the previous close. The trading volume was also high, with one crore shares of the company being exchanged on the stock exchanges, surpassing the one-week average of 97 lakh shares.

The Securities and Exchange Board of India (SEBI) has approved the public offer of Tata Tech on June 27, marking it as the first initial public offering (IPO) from a Tata Group company in the last 20 years. Tata Motors currently owns 74.69 percent of Tata Tech.

The major plan of Tata Motors is to sell 26.77 percent of its stake in Tata Tech to generate funds and reduce its debt. This move has been perceived positively by investors. Moreover, the stock has also experienced a significant increase of around 51 percent this year.

Please note that the opinions and investment advice shared by the experts on Moneycontrol.com are their own and not supported or approved by the website or its management. Moneycontrol.com recommends that users seek guidance from certified experts before making any investment choices. The mentioned percentage refers to the expected growth in the fiscal year 2024-2025, mainly influenced by improved profit margins in JLR and its commercial vehicle (CV) segment.

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