Tata Motors jumps 10% as analysts see business recovery in India, JLR volumes

Shares of Tata Motors Ltd. won in seven months at the most, as analysts expect Jaguar Land Rover’s volumes to recover and domestic business to improve, helped by a revival in demand for commercial vehicles and increased passenger car production.

Optimism arises even when the carmaker reports a loss for the fifth consecutive quarter, albeit more narrowly, amid supply disruptions and rising investment costs.

Tata Motors Q4 FY 2022 (consolidated, y / y)

  • Revenue fell 11% to Rs 78,439 (Bloomberg consensus estimate: Rs 80,928).

  • Ebitda fell 32% to 8726 kroner (estimated: 8553 kroner).

  • Ebitda’s margin is 10.6% versus 14.4%.

  • Net loss of Rs 1,033 Crore against loss of Rs 7,605 Crore (Estimated gain: Rs 286 Crore).

“The supply situation is gradually improving, with inflation in goods likely to remain high,” a statement from Tata Motors said.

Analysts also see the deterioration of JLR’s product mix, the blocking of Covid in China, and the shortage of semiconductors as short-term challenges. But they expect the carmaker to remain resilient, aided by new launches, price transitions and a strong order book.

Shares of Tata Motors rose nearly 10% in trading during the day on Friday. The volume of stock trading is four times the average for 30 days. Of the 33 analysts tracking the company, 26 support “buy”, three offer “hold” and four recommend “sell”, according to Bloomberg. The average value of the 12-month target price suggests an increase of 30.6%.

The shares have the highest profit on the reference Nifty 50.

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