NEW DELHI: One of every three Tata Group stock delivered more than 100 per cent return in 2021, with market capitalisation of the group’s 28 listed stocks rising 46 per cent for the year, double Nifty50’s 23 per cent return during the period.
Except for Rallis India, all the group stocks equalled or beat market returns during the calendar, data compiled from corporate database AceEquity suggests. Interestingly, all key gainers were loss-making companies.
The biggest gainer was Tata Teleservices (Maharashtra), which skyrocketed 2,373 per cent for the year to Rs 197.1 apiece on Thursday from Rs 7.97 apiece as of December 31, 2021. The stock, which was trading in a range in the first five months of the year, spurted after Tata Sons decided to revive the telecom entity in a new avatar called Tata Tele Business Services (TTBS) to cater to small and medium enterprises. The company had been incurring losses for at least four financial years.
Another loss-making firm Automotive Stampings and Assemblies saw its shares rallying 2,282 per cent. Analysts do not track this smallcap stock.
Tayo Rolls, a subsidiary of Tata Steel since December 2008, rallied 270 per cent this year. Tata Steel owned 55.24 per cent stake in this company as of September 30. This too is a loss making company and is under corporate insolvency resolution plan.
Overall 11 (including Tata Motors DVR) out of 28 group stocks more than doubled investor wealth in 2021. Market cap of the group rose to Rs 23,03,253 crore compared with Rs 15,75,444 crore, up 46.20 per cent.
Nelco, Tata Elxsi, Tata Power Company, Automobile Corporation of Goa, Tata Motors and Tata Coffee are some other shares which have rallied 100-260 per cent this year.
Among them, analysts are largely bullish on Tata Motors even as the stock has been the top Nifty50 performer of 2021.
Motilal Oswal, which has this stock in its 2022 picks, said Tata Motors should witness a gradual recovery from Q2FY22 lows as supply-side issues ease and commodity headwinds stabilise for the India business.
“It would gain from the triple benefits of: a) a macro recovery, b) company-specific volume/margin drivers, and c) sharp improvement in FCF and leverage in both JLR as well as the India business,” it said.
Tata Motors’ DVRs are up 207 per cent this year.
In case of Tata Power, which is tracked by 21 analysts, the median target for the stock suggests 16 per cent potential downside from here on. Not many analysts track Nelco, Tata Coffee and Automobile Corporation of Goa. Three analysts tracking Tata Elxsi have a median target that suggests 14 per cent potential downside for the stock.
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