Tata Motors shares hit 52-week high after Tata group auto majors Q1 results beat estimates; what should investors do?

Tata Motors shares touched a 52-week high on Wednesday, a day after the Tata group auto major reported a better-than-expected set of financial results for the April-June period. The Tata Motors stock gained by as much as Rs 25.9 or four per cent to Rs 665.3 apiece on BSE, surpassing a 52-week peak scaled the previous day. 

Tata Motors shares traded in large volumes. At 10 am, the stock was up 1.9 per cent at Rs 651.8 apiece on the bourse. As many as 9.8 lakh Tata Motors shares changed hands on the exchange as against a daily average of 7.7 lakh in the past two weeks, according to provisional exchange data. 

Tata Motors Q1 results

After market hours on Wednesday, Tata Motors reported a consolidated net profit of Rs 3,202.8 crore for the quarter ended June 2023, as against a consolidated net loss of Rs 5,006.6 crore for the corresponding period a year ago.

The carmaker's quarterly revenue stood at Rs 1,01,528.5 crore as against Rs 71,227.8 crore for the year-ago period, according to a regulatory filing. 

According to Zee Business research, the auto maker's quarterly net profit was estimated at Rs 2,000 crore and revenue at Rs 1,01,500 crore. Tata Motors' margin — a key measure of profitability — improved to 13.3 per cent for the June quarter from 4.4 per cent a year ago, better than Zee Business analysts' estimate of 11.4 per cent. 

Tata Motors said it remains optimistic about the demand situation despite near-term uncertainties, and expects a moderate inflationary environment to continue in the near term.

Revenue from Tata Motors subsidiary Jaguar Land Rover (JLR) increased 57 per cent to 6.9 billion pounds, according to a company statement. Read more on Tata Motors Q1 results

What brokerages say

CLSA maintained a 'buy' rating on Tata Motors after the earnings announcement, and raised its target price for the Tata group stock by Rs 90 to Rs 780 apiece, implying an upside to the tune of 22 per cent from the current market price. 

Tata Motors to convert DVR shares into ordinary shares

Tata Motors also announced cancelling its DVR shares, issued in 2008, at a 23 per cent premium to the current market price.

The transaction will reduce the total share capital by nearly four per cent, making it earnings per share-accretive for all shareholders, Tata Motors said. Read more on Tata Motors DVR shares

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