Tata Motors up 8% after strong JLR numbers and Goldman Sachs upgrade
Tata Motors shares rallied nearly 8 percent on April 10 after Goldman Sachs upgraded the automaker following strong JLR numbers for the January to March 2023 quarter.
Tata Motors shares rallied nearly eight percent on April 10 after Goldman Sachs upgraded the automaker following strong JLR numbers for the January to March 2023 quarter.
The brokerage has also raised the 12-month target price from Rs 480 to Rs 550, implying a 26 percent upside from April 6 closing price. It said it has upgraded the stock to ‘buy’ to factor in the improving JLR outlook.
This is against the backdrop of JLR wholesale volumes for the March quarter that stood at 94,649 units (excluding the Chery Jaguar Land Rover China joint venture), up 19 percent compared to the prior quarter ending 31 December 2022 and 24 percent compared to the same quarter a year ago.
Compared to the prior year, wholesale volumes were higher in all markets led by overseas (62 percent), UK (24 percent), Europe (22 percent), China (17 percent) and North America (2 percent).
Jaguar Land Rover also expects free cash flow of over 800 million pounds (about $1 billion) for the fourth quarter, boosted by a 24 percent rise in wholesale volumes as chip and other supply constraints eased. Tata Motors, which acquired the British car maker in 2008, had set a target of 1 billion pounds of free cash flow for the fiscal year.
BoFA Securities has maintained its buy stance on Tata Motors with a target price of Rs 475, noting solid volumes in the fourth quarter. It pointed to a free cash flow beat at JLR. According to BoFA, the risk reward is favourable at current levels.
The analysts’ commentary comes after the carmaker reported its sales for the March ended quarter.
Tata Motors reported group global wholesales, at 3,61,361 units in the fourth quarter of FY23. Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range in the January-March period this year stood at 1,18,321 units, up 3 percent over the same period of FY22.
First Published: Apr 10, 2023 9:11 AM IST
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