The share price of Tata Motors increased by more than seven percent to start at a new 52-week high on Monday. This came after the auto major posted good results for the third quarter, including a twofold increase in its consolidated net profit. At the BSE, the price of a share of Tata Motors increased by as much as 7.19 percent, reaching ₹942.00.
In the third quarter of the fiscal year 24 (FY24), Tata Motors reported a net profit of ₹7,025 crore. This is a 137.5% increase over the previous year’s net profit of ₹2,957.71 crore. The company’s strong demand for passenger and commercial cars, price hikes, and a superior product mix contributed to this growth.
As compared to the previous year, the company’s sales in the third quarter of fiscal year 24 increased by 24.9%, reaching ₹110,577 crore from ₹88,489 crore. The revenue generated by the British luxury automotive firm, Jaguar Land Rover (JLR), had a significant increase, rising from ₹58,863 crore to ₹76,665 crore YoY.
EBITDA climbed by 42.5% year-on-year to ₹15,333 crore, and EBITDA margin expanded by 171 basis points (bps) to 13.94% during the December quarter, resulting in an improvement in operating performance.
Jefferies, a global brokerage firm, increased its earnings per share (EPS) forecast for Tata Motors by 7-11% for the fiscal year 24–26. The company has set the target price for the stock at ₹1,100 per share and has assigned a ‘Buy’ rating to the product.
According to Nomura, Tata Motors’ JLR margins for the third quarter were higher than expected, and the company feels that additional re-rating is inevitable. According to the company, the re-rating of JLR could be driven by the success of electric vehicles (EVs).
A ‘Buy’ call has been issued on the stock, and the target price for each share is now set at ₹1,057.The consolidated EBITDA of Tata Motors came in three percent lower than the estimates provided by Kotak Institutional Equities. On the other hand, the EBITDA of the JLR and domestic CV businesses came in ahead of the company’s expectations due to the presence of raw material tailwinds and a richer product mix. On the other hand, that of the domestic PV business was impacted by higher product development expenses toward electric vehicles.
The domestic brokerage firm anticipates that its overall performance will continue to be strong throughout the fiscal years 2024-26E, lead by an improvement in the JLR business performance that is driven by consistent demand patterns, gained market share in the PV and CV segments, and a net cash balance sheet by the fiscal year 2025E.
Higher EBITDA margin assumptions across JLR and CV divisions have led to an increase of one to three percent in the company’s consolidated EBITDA expectations for the fiscal year 2024-26. In addition to this, it has boosted the EBITDA projections for FY2024-26 JLR by two to four percent, driven by a more diverse product mix and cost-control efforts.
Tata Motors
Kotak Equities has upgraded the stock of Tata Motors from a “Reduce” to a “Add” status, and they have also increased the target price to ₹950 a share, which was previously ₹800.
In the past month, the share price of Tata Motors has increased by more than 11%, and in the past three months, it has increased by more than 44%. Over the course of one year, the stock has increased by more than 110%, which has resulted in investors’ money being doubled.
On the Bombay Stock Exchange (BSE), Tata Motors shares were rising by 6.88% at a price of ₹939.25 a share at 9:20 am.
On the Nifty50 index, Tata Motors was the company that ended the day with the highest gain on Monday, February 5. After the Tata Group auto giant, whose popular automobiles include Nexon and Punch, posted a better-than-expected set of financial results for the October-December (Q3 FY24) period, the manufacturer gained as much as Rs 70.8, or 8.05 percent, to register an all-time high of Rs 949.6 apiece on the Bombay Stock Exchange (BSE). As of the closing price on the BSE, the counter was at Rs 926.8, a decrease of Rs 48, or 5.46 percent.
Results for the third quarter of Tata Motors
On Friday, Tata Motors said that it has achieved a consolidated net profit of Rs 7,025.1 crore for the quarter that ended on December 31, 2023. This is a 2.4 times increase in comparison to the same period of time in the previous year. According to a filing with the regulatory body, the company’s sales increased by one-fourth on a year-on-year basis to a total of Rs 1,09,799.2 crore.
