Tata Motors shares rally 2% as Moody's upgrades JLR to Bat

There may be more upside for the stock on hopes of better sales from JLR, investors should use correction to start accumulating, say analysts

Tata Motors Ltd.

Prices | Financials | Company Info | ReportsNEW DELHI: Tata MotorsBSE 0.28 % Ltd rallied a little over 2 per cent in trade on Wednesday, a day after rating agency Moody's upgraded Jaguar Land Rover Automotive (JLR) corporate rating from 'Ba3' to 'Ba2' on strong and fairly s

At 09:50 a.m.; Tata Motors pared some of the morning gains and was trading 0.7 per cent higher at Rs 337.45. It has hit a low of Rs 336.25 and a high of Rs 342 in trade today.

The outlook on all ratings is stable. "The upgrade to Ba2 was prompted by JLR's strong and fairly stable credit metrics over the past three years," said Falk Frey, Moody's senior vice-president and lead analyst for JLR.

JLR's strong results in the 2012-13 were driven by the company's broadened and competitive model line-up and its improved geographic presence in emerging markets, especially in China.

Tata Motors surprised the street following a sharp rally of over 12 per cent in the month of September largely on account of strong sales reported by its subsidiary Jaguar Land Rover (JLR) for the month of August.

According to analysts, while there may be more upside for the stock on hopes of better sales from JLR, it has run up sharply and investors should use correction to start accumulating.

Most global brokerages have maintained 'buy' recommendations after the JLR monthly sales data, but the stock has rallied close to their 12-month price target.

UBS maintain 'Buy' on Tata Motors with a target price of Rs 380. Goldman Sachs has placed a 'Buy' call on the global auto giant with a target price of Rs 36
RANJAY KUMAR
PGDM
TIMES OF INDIA