Tata Motors Shares Surge 8% on Strong YoY Jump in Global Wholesales in Q4FY23
Jist : Tata Motors surged nearly 8 per cent in Monday’s trade post the robust global wholesale numbers which surged 8 percent YoY
Tata Motors, the Indian multinational automotive manufacturer, saw its shares soar over 8% in early trade on Monday, fueled by an impressive year-on-year (YoY) increase in its global wholesales for Q4FY23.
As of 9:25 am, the stock was trading at Rs 463.85, marking a 6% surge on the NSE.
Tata Motors reported global wholesales of 3,61,361 units for the quarter ending March 31, 2023, marking an 8% growth over FY22, according to a filing with the exchanges. This figure includes sales of its flagship Jaguar Land Rover vehicles.
The global wholesales of Tata Motors passenger vehicles in Q4 FY23 reached 135,654 units, reflecting a 10% rise compared to Q4 FY22, as per the exchange filing. Meanwhile, global wholesales for Jaguar Land Rover stood at 107,386 vehicles, with Jaguar wholesales reaching 15,499 vehicles, and Land Rover wholesales totaling 91,887 vehicles for the quarter.
However, the wholesales of all commercial vehicles and Tata Daewoo range dipped 3% YoY to 118,321 units for the reported quarter, as stated in the filing.
Leading brokerage firm Goldman Sachs has recommended a buy rating on Tata Motors stock with a price target of Rs 550. The firm cited an improved volume outlook for Jaguar Land Rover and noted that it could contribute to 70% of Tata Motors’ total revenue.
Goldman Sachs further highlighted that the stock is currently trading at 7.4X P/E on FY25 estimates, compared to the mean. The global investment and financial services firm also raised its FY24-25E EBITDA by 15%/16%, arguing that the market is underestimating JLR’s EBIT margin potential.
In addition to Goldman Sachs, Nomura and CLSA have also issued buy recommendations on Tata Motors stock, with price targets of Rs 508 and Rs 544, respectively.
Nomura noted that JLR’s volume growth has been supported by improved chip supply, and highlighted a 190 basis points QoQ increase in its 4QFY23 EBITDA margins at 13.8%, with EBIT margins reporting a rise of 270 basis points at 6.5%.
CLSA, in its report, pointed out management’s assessment of a robust Free Cash Flow (FCF) generation of over £800 million for the quarter, driven by high volume growth.
The stock has been on an upward trend over the past six trading sessions, emerging as the top gainer in the Nifty50 index as well as the Nifty Auto index.
Meanwhile, the Indian frontline indices S&P BSE Sensex and Nifty50 were trading in the green at the same time, building on the positive momentum of the previous five trading sessions. The broader Nifty50 was trading at 17,652, up 0.3%, while the 30-stock Sensex was higher by 0.25% at 59,982.
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