BackTata Motors spurts 13% as JLR sales recover in December quarter
Retail sales of Jaguar Land Rover for the December quarter stood at 1.28 lakh vehicles, registering a 13.1% growth compared with 1.13 lakh vehicles sold in the preceding quarter.
PremiumMUMBAI : Shares of Tata Motors Ltd rallied as much as 13.36% on Tuesday -- highest since September 2018 -- after its subsidiary Jaguar Land Rover reported a sequential rise in the retail sales for the third quarter ended December 2020.
At 12:30 pm, the scrip traded at ₹242.55 apiece on the BSE, up 10.20% from its previous close, while the benchmark Sensex was flat at 49,298.65.
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Retail sales of Jaguar Land Rover for the December quarter stood at 1.28 lakh vehicles, registering a 13.1% growth compared with 1.13 lakh vehicles sold in the preceding quarter. On year-on-year (y-o-y) basis, the sales numbers were down 9%. China sales rose 20.2% as against the prior quarter and 19.1% y-o-y.
Analysts at Emkay Global Financials in a sector outlook said "The Automobile sector remains a key beneficiary of economic recovery and low interest rates."
"Tata Motors is likely to post revenue/EBITDA growth of 20%/49%, due to the improvement in JLR and standalone operations. Healthy volumes and cost controls are expected to support margin expansion".
On Monday, shares of Tata Motors zoomed to a 52-week high on the buzz that it was set to enter into a partnership with Tesla and that the electric vehicle giant may even take a stake in its passenger vehicle (PV) business.
However, a Tata Motors spokesperson denied any such development. “Tata Motors has not taken any decision regarding a strategic partner for its PV business and categorically denies any and all rumours suggesting the same," the company said in a statement.
Retail sales in most other regions also continued to recover and were up significantly on the prior quarter in North America (up 31.7%), Overseas (up 26.6%) and Europe (up 20.5%). However, sales in these regions have not yet recovered to pre COVID-19 levels with sales for the quarter lower than a year ago in North America (down 17.2%), Overseas (down 20%), Europe (down 16.3%) and the UK (down 8.9%).
Motilal Oswal in a sector preview note said "EBITDA margins to expand for the first time after eight quarters of decline."
"Revising FY22E EPS estimates to factor in volume upgrades as well as substantial commodity cost inflation, upgrade TTMT 28%. Being a seasonally slow month, Dec’20 saw decent demand (at par YoY) despite discounts being lower by 50% YoY".
Retail sales of Jaguar advanced 2.7% quarter-on-quarter (Q-o-Q) and dropped 20.8% Y-o-Y to 28,072 units in Q3 December 2020. Similarly, Land Rover sales soared 16.4% Q-o-Q while its Y-o-Y sales skid 5.1% to 1 lakh units in Q3 December 2020.
The sales ramp-up of the new Land Rover Defender saw retails rising to 16,286 vehicles in the October to December quarter, up by almost 66% on the preceding quarter with sales of the shorter wheelbase Defender 90 having initiated. For Jaguar, retail sales of all-electric I-PACE jumped 69.3% Y-o-Y with 7,807 sold in the quarter, as demand for electric vehicles continues to grow.
Tata Motors reported a consolidated net loss of ₹343.28 crore in Q2 FY21 as compared to a net profit of ₹175.76 crore in Q2 FY20. Net sales during the quarter declined 18.4% year-on-year (Y-o-Y) to ₹52,839.02 crore.
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