The Nifty Auto index fell by 0.69% to 25,092.30 on Friday, 21 June, while the Nifty 50 also dropped by 0.28% to 23,501.01 after reaching record highs. Despite this, the main indices have gained for three consecutive weeks, driven by financials and the return of foreign investors.
During the past four days, the Nifty’s rise of 0.15% was smaller compared to last week’s 0.75% and the 3.37% increase the week before. The index has stayed within a narrow 300-point range for two weeks. Small and mid-cap stocks also went up for the third week in a row, even though they were quiet on the day.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, mentioned that Nifty is struggling to stay above 23,600 but remains steady due to support from moving averages. He advised focusing on picking high-quality stocks during this time and watching global markets for further clues.
1. Tata Motors vs Bajaj Auto: Share Price Trends
On Friday, Tata Motors’ shares opened at ₹979.90 and peaked at ₹981.00, close to its 52-week high of ₹1,065.60 on the BSE. The stock ended 1.74% lower at ₹961.05. Over the past year, Tata Motors has seen a steady performance.
Meanwhile, Bajaj Auto’s shares started at ₹9,685 and reached an intraday high of ₹9,725, just shy of its 52-week high of ₹10,037.30 on the BSE. The shares closed 0.59% lower at ₹9,575. Bajaj Auto has delivered impressive returns to investors: 8.95% in the past month, 11.19% over three months, 50.87% in six months, and 105.97% in one year. Over three years, the stock has soared by 130.43%.
2. Tata Motors vs Bajaj Auto: Technical Analysis
Bajaj Auto recently introduced an electric three-wheeler (E-3W) in the third quarter of FY24 and has quickly become a leading player, benefiting from its strong brand. Profitability in the E-3W segment matches that of traditional engines, though electric scooters will take longer to become profitable. Bajaj aims to increase Triumph motorcycle production to about 10,000 units per month from the current 6,000.
Prabhudas Lilladher, a domestic brokerage firm, expects strong demand for Bajaj Auto in both rural and urban markets due to new launches and a strong position in the 125+cc category. Swarnendu Bhushan, Co-Head of Research at Prabhudas Lilladher Pvt. Ltd, upgraded Bajaj’s stock rating from ‘sell’ to ‘hold,’ citing high growth in the EV segment. The target price is now ₹9,984, up from ₹20 earlier.
For Tata Motors, Elara Securities suggests that the long-term target of a 15% EBIT margin for its luxury brand Jaguar Land Rover (JLR) is ambitious and depends on the acceptance of its EV products. JLR’s market share in the global premium segment fell from 6.1% in 2020 to 5.4% in 2023, but its revenue share rose from 8% to 10%, driven by a richer product mix. Elara Securities recommends ‘Accumulate’ with a target price of ₹1,100, valuing JLR at 2.5 times FY26E adjusted EV/EBITDA, implying an 8.0x target P/E. This is higher than BMW and Mercedes but 30% lower than Porsche, which has a 17.7% EBIT margin.
3. Tata Motors vs Bajaj Auto: Outlook
Bajaj Auto aims to continue its momentum in the domestic market and expand production for new ventures, expecting strong demand in the current fiscal year. Niraj Bajaj, Chairman of Bajaj Auto, noted that India, now the fastest-growing economy, is expected to achieve over 7% real GDP growth in FY2024, with continued buoyancy anticipated in FY2025. Bajaj Auto also plans to expand capacity and network for its new ventures like Chetak electric scooters, electric three-wheelers, and Triumph motorcycles.
Tata Motors is cautiously optimistic about domestic demand for the year, expecting the first half to be relatively weaker. The premium luxury segment is likely to remain strong despite concerns over overall demand. Tata Motors is confident in delivering a strong performance in FY25.
4. Tata Motors vs Bajaj Auto: P&L Print, Revenue
Tata Motors reported a 14.3% increase in total revenue from operations in Q4 FY24, reaching ₹1.2 lakh crore compared to ₹1.05 lakh crore in the same period last year. JLR, known for its Ranger Rover and Defender SUVs, plays a crucial role in Tata’s results, accounting for about two-thirds of its consolidated revenue. JLR reported its highest-ever full-year revenue of £29 billion in FY24, up 27% from FY23, with a net profit of £2.6 billion.
Bajaj Auto posted an 18% rise in consolidated net profit at ₹2,011.43 crore for Q4 FY24, becoming the first two-wheeler maker to report March-quarter results. This was driven by strong domestic demand for motorcycles and a recovery in exports. The company’s revenue for the January-March quarter rose by 30% to ₹11,249.8 crore from ₹8,660 crore in the previous year.
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