Tata Motors Zooms Over 8% As Global Wholesale Prices Increase in Q4; Should you Invest?

Why are Tata Motors Shares Rising? Tata Motors shares rallied more than 8 per cent on Monday Intraday trade was buoyed by a strong year-on-year (YoY) jump in its global wholesales in Q4FY23.

The company reported its global wholesales at 3,61,361 units for the quarter ended March 31, 2023, up by 8 per cent over FY22, the company informed in its filing to the exchanges. The global wholesales also included sales of its flagship Jaguar Land Rover vehicles.

The global wholesales of Tata Motors passenger vehicles in Q4 FY23 were at 135,654, which was higher by 10 per cent as compared to Q4 FY22, the exchange filing said. Global wholesales for Jaguar Land Rover stood at 107,386 vehicles. Jaguar wholesales for the quarter were 15,499 vehicles, while Land Rover wholesales for the quarter were 91,887 vehicles.

However, wholesales of all the commercial vehicles and Tata Daewoo range fell 3 per cent YoY to 118,321 for the reported quarter, the filing said.

Brokerages Give Tata Motors a Thumbs Up

Goldman Sachs double upgraded the Tata group auto giant to ‘buy’ from ‘neutral’ and raised its target price for the stock by Rs 70. The brokerage’s action came about after a quarterly data report by Tata Motors showed a 24 per cent jump in its British subsidiary Jaguar Land Rover’s wholesales amid improving global availability of semiconductor chips. Goldman Sachs revised its target price for Tata Motors from Rs 480 to Rs 550, implying upside potential of 25.7 per cent compared with its previous close.

According to BofA Securities, the Jaguar Land Rover volumes were solid with a better-than-expected booking run rate. The brokerage sees a case for accelerated de-leveraging for the company.

Meanwhile, Nomura and CLSA have also given buy recommendations on Tata Motors stock for targets of Rs 508 and Rs 544, respectively.

JLR’s volume rise has been aided by better chip supply, Nomura said. “The carmaker witnessed 190 basis points QoQ jump in its 4QFY23 EBITDA margins at 13.8 per cent while its EBIT margins reported an increase of 270 basis points at 6.5 per cent,” it added.

CLSA in its report pointed out management’s assessment of a strong FCF (Free Cash Flow) generation in excess of £800m for the quarter driven by high volume growth.

Tata Motors shares have risen 17 per cent so far in 2023, sharply outperforming the Nifty benchmark index which has declined three per cent.

It is the top Nifty50 gainer today and also the biggest gainer on the Nifty Auto index.

The Tata Motors stock gained by as much as Rs 35.6 or 8.1 per cent to Rs 473.1 apiece on BSE in morning deals.

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