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Business News/ Markets / Stock Markets/  Tata Motors share price jumps over 7% to a record high after strong Q3 results; should you buy?
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Tata Motors share price jumps over 7% to a record high after strong Q3 results; should you buy?

Tata Motors' revenue in Q3FY24 rose 24.9% to ₹110,577 crore from ₹88,489 crore, YoY. Its revenue from the British luxury car unit, Jaguar Land Rover (JLR) jumped to ₹76,665 crore from ₹58,863 crore, YoY.

Tata Motors share price has rallied over 11% in the last one month and more than 44% in three months. The stock has doubled investors’ money in one year as it surged over 110% during the period.Premium
Tata Motors share price has rallied over 11% in the last one month and more than 44% in three months. The stock has doubled investors’ money in one year as it surged over 110% during the period.

Tata Motors share price rallied over 7% to open at a fresh 52-week high on Monday after the auto major reported strong Q3 results with a two-fold jump in its consolidated net profit. Tata Motors shares gained as much as 7.19% to 942.00 apiece on the BSE.

Tata Motors posted a net profit of 7,025 crore in the third quarter of FY24, a 137.5% growth from 2,957.71 crore in the year-ago period, helped by strong demand for passenger and commercial vehicles, price hikes and a superior product mix.

The company’s revenue in Q3FY24 rose 24.9% to 110,577 crore from 88,489 crore, YoY. Its revenue from the British luxury car unit, Jaguar Land Rover (JLR) jumped to 76,665 crore from 58,863 crore, YoY.

Read here: Tata Motors Q3 Results: Net profit surges 137% to 7,025 crore, revenue up 25% YoY; 5 key highlights

Operating performance during the December quarter improved as EBITDA increased by 42.5% YoY to 15,333 crore and EBITDA margin expanded by 171 basis points (bps) to 13.94%.

Global brokerage firm Jefferies raised FY24-26 EPS estimates for Tata Motors by 7-11%. It has a ‘Buy’ rating on the stock and increased the target price to 1,100 per share.

Nomura said Tata Motors’ Q3 JLR margins were ahead of estimates and believes further re-rating is likely. It expects the success of electric vehicles (EVs) could drive JLR re-rating. It has a ‘Buy’ call on the stock with a target price of 1,057 per share.

Tata Motors’ consolidated EBITDA came in 3% below Kotak Institutional Equities’ estimates, while JLR and domestic CV business EBITDA came in ahead of its expectations on raw material tailwinds and richer product mix, whereas domestic PV business EBITDA was impacted by higher product development expenses toward EV. 

Overall, the domestic brokerage firm expects FY2024-26E performance to remain healthy led by improvement in JLR business performance driven by steady demand trends, market share gain in PV and CV segments and net cash balance sheet by FY2025E. 

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It has increased FY2024-26 consolidated EBITDA estimates by 1-3% on account of higher EBITDA margin assumptions across JLR and CV segments. It has also increased FY2024-26 JLR EBITDA assumptions by 2-4% driven by richer product mix and cost-control measures. 

Kotak Equities upgraded Tata Motors stock to ‘Add’ from ‘Reduce’ earlier and raised the target to 950 per share from 800 earlier. 

Tata Motors share price has rallied over 11% in the last one month and more than 44% in three months. The stock has doubled investors’ money in one year as it surged over 110% during the period.

At 9:20 am, Tata Motors shares were trading 6.88% higher at 939.25 apiece on the BSE.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 05 Feb 2024, 09:20 AM IST
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