Tata Motors’ stock price rose 8 percent in early trading on May 13 – a day after the company announced its quarterly results for March. Shares of the company rose 8 percent on deals opening at Rs 401 on the BSE after the homegrown automaker’s net loss narrowed to Rs 1,033 crore in the quarter ended March, compared to a loss of Rs 7,605 crore in the same period a year ago. It witnessed a revenue decline of more than 11 percent year-on-year to Rs 78,439 crore.
The company said in a statement: “Demand remains strong despite geopolitical and inflation concerns. The supply situation is gradually improving, while commodity inflation is likely to remain high. We expect performance to improve over the year as China’s COVID-19 eases -19 and semiconductor inventories are improving and aiming for a strong improvement in EBIT (earnings before interest and tax) and free cash flows in FY 23 to be nearly net auto debt free in FY 2024.”
Jaguar Land Rover (JLR) sales were £4.8bn in the fourth quarter, down 27 percent from last year due to the retirement of the previous-generation Range Rover.
Tata Motors: What Should Investors Do?
“We maintain our positive stance on Tata Motors as the PV segment is likely to gain further market share, led by a renewed portfolio, customer preference for SUVs and increasing EV penetration. resurgence in JLR and a strong order book to take advantage and boost the FCF generation,” said broker Prabhudas Lilladher.
It has maintained its ‘Buy’ rating on Tata Motors stock with a revised SOTP-based FY24 target of Rs 600. The brokerage expects 1QFY23 to come under pressure, but over FY23, new products, the momentum of the demand and price pass-throughs improve profitability, in his view.
Jaguar Land Rover (JLR) sales were £4.8bn in the fourth quarter, down 27 percent from last year due to the retirement of the previous-generation Range Rover.
“JLR’s order book is strong at 168,000 units, while dealer inventories are low. New generation products such as RR/RR Sport are expected to support future order bookings. Chip supply should improve in the future, but in a staggered way. We expect a strong CAGR of 20 percent from FY22-24E. Reconfirm Buy with a revised SOTP-based target price of Rs 535 (Rs 530 earlier), based on June 2024E (March 2024E earlier) estimates,” Emkay said.
Brokerage house CLSA has upgraded Tata Motors’ rating to underperform sales and has also raised its target price from Rs 392 per share to Rs 411. Domestic operations have been strong while JLR struggles to continue and disappoints due to a negative surprise on ASP. The volumes, mix and higher realization led to margin recovery in CV and PV, while strong demand should lead to volume growth.
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