Tata Motors Jumps After Morgan Stanley Upgrades Citing Outlook

Tata Motors Reports: The next two years could be “strong” for Indian autos and particularly Tata’s business, because of its lean cost structure, refreshed model portfolio and leverage, Morgan Stanley says, upgrading Tata Motors’ stock.

Stock gains as much as 6.6%, the most in about seven months.

Morgan Stanley

  • Raises Tata Motors to ‘overweight’ from ‘equal-weight’, and revises the price target upwards by 50% to Rs 448.
  • As India’s auto cycle emerges from multi-year lows, Tata Motors will see the highest operating and financial leverage gains as well as market-share wins in its passenger vehicle and commercial vehicle businesses.
  • These trends could re-rate the name from a global luxury play to a “global and India” play; Jaguar Land Rover faces challenges from the semiconductor shortage in the near term and a long-term issue of a small scale, but these risks “now look well understood”.
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