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Home / Markets / Stock Markets /  Rakesh Jhunjhunwala portfolio: Motilal Oswal is bullish on this Tata Group stock
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Domestic brokerage and research firm Motilal Oswal has ‘Buy’ recommendation on Tata Motors shares with a target price of 565 per share. While the advent of electric vehicles (EVs) is causing disruption for incumbents, the broker believes that EVs are creating big opportunities for smaller players, new entrants, and start-ups alike.

The recent fundraise by Tata Motors (TTMT) in the e-PV business and the resultant re-rating of the stock has made the brokerage curious about how investors should look at the valuations of the EV businesses of incumbent OEMs and whether a re-rating should depend on the external fundraise, it said.

“Even in India, the recent fundraises in the EV segment have been at very rich valuations for businesses that are at the very nascent stage of evolution. Ola Electric raised $200 million in September 2021, valuing the start-up at $3 billion. Similarly, Tata Motors raised $1 billion in October 2021, valuing its Electric PV business at $6.7–9.1 billion," the note on automobiles highlighted.

The brokerage house believes that the valuations of pure EV businesses are driven by the expected pace of electrification in the segment and the competitive landscape in the EV segment. In the Indian context, the speed of electrification would differ substantially across segments.

As per BSE shareholding pattern, Indian ace investor and stock market trader Rakesh Jhunjhunwala holds 1.11% stake or 3,67,50,000 shares as of September 2021 in the Tata Group's auto subsidiary. Tata Motors' shares have given multibagger return in 2021 as the stock has rallied over 149% this year (year-to-date) so far.

On the other hand, Motilal Oswal has ‘Neutral’ rating (target price 1,700) on another Rakesh Jhunjhunwala portfolio auto stock Escorts, in which the Big Bull holds 4.75% stake as of September 2021.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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