Religare maintains ‘buy’ on Tata Motors, target Rs 350

Brokerage house Religare has retained its “buy” rating on Tata Motors  citing steady growth in monthly retail sales of its Jaguar and Land Rover luxury brands. The firm has a price target of Rs 350 per share.

Jaguar Land Rover’s retail sales last month increased 12 percent YoY, best ever for May. However, parent Tata Motors’ global wholesales in May were disappointing (down 18 percent). There was only a marginal rise in JLR wholesales.

“JLR’s wholesale and retail volumes have increased by 9 percent and 12 percent respectively. Sustained momentum in the Chinese market and new product launches suggest a healthy volume run-rate in the months to come,” says the Religare note to clients Monday.

“We forecast 422,500 units for FY14 (a growth of 14 percent year-on-year). Further the improving product and market mix should aid margins in FY14. We recommend buying the stock on any declines owing to lower-than-expected May wholesale volumes,” says the Religare note to clients.

Shares of Tata Motors were trading at Rs 293.20, down Rs 3.90 or 1.31 percent.

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