Tata Motors stock value surged over 7% to initiate trading at a new peak for the 52-week period on Monday following robust Q3 outcomes, showcasing a twofold surge in its combined net earnings. Tata Motors equities climbed by as much as 7.19%, reaching ₹942.00 each on the BSE.
For the third quarter of FY24, Tata Motors reported a net profit of ₹7,025 crore, marking a remarkable 137.5% upswing from ₹2,957.71 crore in the corresponding period of the prior year. This surge was driven by robust demand for both passenger and commercial vehicles, strategic price increases, and an enhanced product mix.
The company’s Q3FY24 revenue ascended by 24.9%, reaching ₹110,577 crore compared to ₹88,489 crore YoY. Revenue from its British luxury car unit, Jaguar Land Rover (JLR), witnessed a substantial increase from ₹58,863 crore to ₹76,665 crore.
Operational efficacy during the December quarter showed enhancement as EBITDA experienced a 42.5% YoY boost, amounting to ₹15,333 crore, and the EBITDA margin expanded by 171 basis points to 13.94%.
In an endorsement of Tata Motors, global brokerage firm Jefferies heightened the EPS projections for FY24-26 by 7-11%, affirming a ‘Buy’ rating on the stock and elevating the target price to ₹1,100 per share.
While Tata Motors’ combined EBITDA slightly trailed Kotak Institutional Equities’ estimates, the EBITDA from JLR and the domestic CV business surpassed expectations due to favorable raw material trends and a more affluent product mix. However, the EBITDA for the domestic PV business was impacted by increased expenses related to product development for electric vehicles.
In conclusion, the domestic brokerage anticipates a robust performance from FY2024 to FY2026, driven by JLR’s improved business performance, consistent demand patterns, augmented market share in both PV and CV sectors, and a net positive cash balance sheet expected by FY2025.