Tata Motors Shares Hit Three-Week High On Strong Jaguar Land Rover Sales
Wholesale volume of Jaguar Land Rover rose 25% over the year earlier in FY24.
Shares of Tata Motors Ltd. gained on Tuesday after its luxury car unit reported a healthy fourth-quarter business update. The wholesale volume of Jaguar Land Rover Automotive Plc. rose 25% over the year earlier to 4,01,303 units in the fiscal ended March 31, 2024.
JLR could see some rerating due to slower EV adoption, as the company has been a laggard in the segment, Morgan Stanley said in an April 8 note. Just 2% of sales come from EVs, as the fast EV transition could have been highly disruptive for the business, it said.
The brokerage remains "overweight" on the automaker with a target price of Rs 1,013 apiece, implying a downside of 0.5% from the current market price on BSE.
Macquarie Research has an 'outperform' rating, with a target price of Rs 1,028 per share.
The company's Ebitda margin could be flattish sequentially, given a 100 basis point decline in share of premium models and higher incentive spend, Macquarie said. Given healthy volume momentum, the Tata company will achieve its targeted net debt reduction to less than £1 billion for FY24, it said.
Shares of Tata Motors rose 1.62% intraday, the highest since March 12. They pared gains to trade 0.64% higher, compared to a 0.32% advance in the benchmark Nifty 50 as of 9:59 a.m.
The stock has risen 121% in the last 12 months. The relative strength index was at 63.
Of the 32 analysts tracking the company, 23 maintain a 'buy' rating on the stock, four recommend a 'hold' and five suggest a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential decline of 2.2%.
