Tata Motors Shares Rally Over 8%, Surge To 7-Month High, Here Is Why

Shares of the country's largest electric vehicle maker and parent of Jaguar Land Rover, Tata Motors, surged as much as 8.12 per cent to hit highest level in seven months to Rs 473 on Monday after it reported strong global wholesales for January-March period.

Tata Motors' global wholesales, including sales of Jaguar land Rover, rose 8 per cent annually to 3,61,361 units in the last quarter of financial year 2023. 

Domestic sale of medium, heavy and intermediate commercial vehicle (MH&ICV) in Q4 2023, including trucks and buses, stood at 54,435 units, compared to 40,391 units in Q4 2022. Total sales for MH&ICV Domestic & International Business in Q4 2023, including trucks and buses, stood at 56,059 units compared to 52,976 units in Q4 2022.

"Tata Motors commercial vehicle domestic sales in Q4 FY23 at 1,12,145 units was 22 per cent higher than the previous quarter (Q3 FY23) and 2 per cent higher than the same quarter, last year (Q4 FY22). This growth was driven by the robust demand for heavy trucks required to service the strong infrastructure push by the Government plus increased activity in e-commerce, construction, and mining. Higher replacement demand, advance buying in anticipation of price hikes, and year-end buying to claim depreciation benefits, further buoyed the demand towards the end of the quarter. As a result, M&HCVs grew by over 33 per cent vs Q3 FY23, while being 18 per cent ahead of Q4 FY22. However, the demand for small and light commercial vehicles continued to be impacted due to high interest rates and high base effect. Overall, Tata Motors CV domestic business grew 22 per cent in FY23 vs FY22," Girish Wagh, Executive Director, Tata Motors Ltd. said.

Its electric vehicle business saw strong sales in March quarter as its sales jumped a whopping 89 per cent to 6,509 units compared with 3,452 units sold during the same period last year.

Tata Motors sales in the domestic and international market for last quarter of 2023 stood at 2,51,822 vehicles, compared to 2,43,459 units during Q4 2022.

Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in Q4 FY23 were at 1,18,321, lower by 3 per cent, over Q4 FY22. 

Global wholesales of Tata Motors passenger vehicles in Q4 FY23 were at 1,35,654, higher by 10 per cent as compared to Q4 FY22. 

Global wholesales for Jaguar Land Rover were 1,07,386 vehicles (**JLR number for Q4 FY23 includes CJLR volumes of 12,737 units). Jaguar wholesales for the quarter were 15,499 vehicles, while Land Rover wholesales for the quarter were 91,887 vehicles.

Tata Motors Financials

Tata Motors returned to profit in December quarter after it reported consolidated net profit of Rs 2,958 crore compared with loss of Rs 1,516 crore in December quarter of 2021.

Its revenue from operations rose 22.51 per cent to Rs 88,489 crore versus Rs 72,229 crore.

Its operating profit margin improved to 13.62 per cent compared with 10.85 per cent in the same quarter last year.

Tata Motors Brokerage Upgrade

Meanwhile, international brokerage firm Goldman Scahs has upgraded the stock to buy for target price of Rs 544, indicating a potential upside of 24 per cent from Friday's closing price and indicated improving volume outlook for the company's luxury arm JLR as the reason behind the upgrade, Moneycontrol reported.