Brokerage firm CLSA opines that Tata Motors' UK-unit Jaguar Land Rover (JLR) is on course to have a strong financial year 2024, only on one condition. The condition is that the European operations perform as per expectations.

Share Market Live

NSE

The brokerage has maintained its buy recommendation on Tata Motors with a price target of Rs 624, which implies a potential upside of 20 percent from Tuesday's closing levels.

CLSA said that JLR's sales have improved substantially in April, with strong and prominent growth witnessed in the US and Chinese markets. However, the business across Europe and the United Kingdom continues to struggle.

The brokerage mentions that margin in financial year 2024 will be aided by higher volumes and a richer product mix. Production levels for the new Range Rover have increased to 2,600 units per week. CLSA also expects higher wholesale volumes for Tata Motors as chip supplies and other constraints ease.

Last week, brokerage firm UBS issued an anti-consensus sell call on Tata Motors, saying that the market is underestimating Jaguar Land Rover's (JLR's) vulnerability amid the rapid electrification of premium cars. It believes that JLR's robust earnings, driven by an unsustainable mix and near-zero discounts, is short-lived and provides a good selling opportunity for investors.

The stock of Tata Motors has depicted a healthy gain over the last three months, rising 25 percent in the period. At its current high of Rs 527.55 per share, the auto stock is trading near its last 52-week high of Rs 537.15 per share, achieved on May 15, 2023.

Shares of Tata Motors are trading 1.4 percent higher at Rs 525.90.