Tata Motors on Monday overtook the market capitalisation of Kia Corporation for the first time since September 2018 to become the 16th most valued automaker in the world. With a market valuation of $27.15 billion, Tata Motors is now positioned just below Hyundai Motor.
Shares of Tata Motors –the top performer on Nifty50 for the year so far – hit yet another record high on Monday after its Jaguar Land Rover (JLR) unit reported 30 percent year-on-year (y-o-y) growth in global wholesale dispatches in the June quarter of the current financial year. JLR, which will report its full financial results for the quarter later this month, is expected to report a positive free cash flow of over £400 million.
Meanwhile, Morgan Stanley raised the target price for the stock to Rs 711 per share from Rs 617 per share on improving margins, stated that free cash flow of £400 million in a seasonally weak quarter, was a positive surprise The foreign brokerage opined, “Continued free cash flow improvement will give the market more confidence in Tata’s de-leveraging story.” Tata Motors, the top performer on Nifty50 so far for the year, has rallied as much as 60 percent against 48 percent gains clocked by Kia Corporation.
While 76 percent of Tata Motor’s order book is made up of high-margin Range Rover and Range Rover sports models, The US contributes about 25 percent of Kia’s total revenue, which was followed by Korea at about 20 percent.
While India and China account for another 5 percent of Kia’s top line, Europe and other regions generate the remaining 45 percent of its combined revenue.
The stock of Tata Motors has rallied more than nine-fold since April 2020, aiding the company to narrow its gap with the Korean Car maker. In fact, Kia Motors commanded a market valuation of over $10 billion in April 2020, which was three times higher than that of Tata Motors.
First Published: Jul 10, 2023 4:48 PM IST
