Tata Motors Shares Price: Shares of Tata Motors jumped over 4 per cent in Monday’s trade as it reported a beat on Q4 Ebitda, as JLR margin surprised positively on better product mix and lower input costs.
Auto giant surpassed estimates in consolidated net profit to Rs 5,407.79 crore in the fourth quarter of FY23, against a net loss of Rs 1,032.84 crore in the same quarter a year ago. Sequentially, the Q4FY23 PAT saw a growth of nearly 83%. The company’s top-line front came in strong with an upside of over 35% YoY in revenue. Furthermore, the Tata Group-backed firm has announced a dividend for FY23.
On a consolidated basis, revenue from operations stood at ₹1,05,932.35 crore in Q4FY23, as compared to Rs 78,439.06 crore in Q4 of previous fiscal. In December 2022 quarter, the revenue was at Rs 88,488.59 crore.
According to Tata Motors, volumes continued to improve on strong India demand and better supplies at JLR. Pricing actions and a richer mix led to improved ASPs and higher revenue growth. Easing inflation, better mix, pricing actions, and favorable operating leverage resulted in strong improvements in margins and profits.”
Talking about the financial performance, PB Balaji, Group Chief Financial Officer, Tata Motors said, “The year ended on a strong note with all automotive verticals delivering robust performances leading to multiple all-time high achievements. The distinct strategy employed by each business is delivering, in unison, leading to a sharp improvement in overall results.”
Will Tata Motors Stay on the Fast Lane?
Analysts largely see JLR production ramp-up, a recovery in domestic commercial vehicle (CV) volumes and a reduction in debt while maintaining their positive stance on the Tata group stock.
Nomura India has revised upward its stock price target to Rs 610 from Rs 508. For Nomura, the numbers were broadly along expected lines. It said Tata Motors’ consolidated Ebitda was largely in line with its forecast, but ahead of Bloomberg consensus’ estimate. Margins, it said, may trend up across segments while suggesting that debt reduction would be a key catalyst for the stock.
Goldman Sachs has raised its price target to Rs 600 on the stock, Jefferies has upped its target on Tata Motors to Rs 665 while JPMorgan has also increased its target on the scrip to Rs 455. CLSA has raised its target on Tata Motors to Rs 624 from Rs 544.
Volume growth, Nuvama Institutional Equities said, is likely to be driven by JLR production ramp-up and the huge pending order book (200,000 units), particularly for new models—Defender, Range Rover,
Range Rover Sport. The brokerage sees 13 per cent volume CAGR for JLR over FY23–25E.
Kotak recommends an ‘Add’ for the Tata Motors stock, calling the Q4FY23 earnings steady for the Indian auto major. The JLR and domestic CV business EBITDA was in line with its expectations. A gradual recovery in JLR volumes, led by an improvement in chip availability, steady demand trends in the domestic market and balance sheet deleveraging augur well for the company, Kotal said in a note.
Emkay revised its target upwards from an earlier SOTP-based TP of Rs 550 to Rs 565 based on FY25E. Q4 earnings were mixed according to Emkay’s expectations as the India-CV business disappointed with muted margin expansion (150 bps QoQ; 390 bps YoY) to 10.3% (versus estimate of 10.8 per cent), despite benefits of operating leverage, softening commodity prices and lower discounts. Whereas, the India-PV business and JLR reported healthy margin expansion, it said further.
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