Tata Motors shares gain after JLR reports 22% rise in retail sales; what should investors do?

Tata Motors share price target, Tata Motors share price, Tata Motors JLR sales March 2024: Tata Motors shares were on investors' radar on Tuesday, April 9, a day after Tata Motors-owned Jaguar Land Rover reported a 22 per cent year-on-year increase in its retail sales at 4,31,733 units for the fiscal ended March 31, 2024, on Monday post market hours.

The stock of the auto major emerged as the top gainer on the Nifty50 index. It rose as much as 1.6 per cent to Rs 1,029.5 on the NSE in opening deals. Tata Motors closed in red at Rs 1,008, down 0.51 per cent on NSE.

JLR sales for the fourth quarter

During the last fiscal year, Tata Motors said in a regulatory filing, the company's wholesales rose 25 per cent to 4,01,303 units against the 2022–23 financial year. The wholesale volumes and retail sales of the UK-based automaker were higher in all regions as compared to the preceding year, it added.

Jaguar Land Rover (JLR) wholesales in the fourth quarter stood at 1,10,190 units, up 16 per cent from a year ago. Retail sales in the January-March quarter stood at 1,14,038 units, up 11 per cent from FY23.

Compared to the prior year, retail sales in the quarter were 32 per cent higher in the UK, 21 per cent in North America, and 16 per cent in the Overseas region. Retail sales in China and Europe fell 9 per cent and 2 per cent, respectively, in the fourth quarter of FY23.

Tata Motors share price target: Should you book profit or stay put?

Morgan Stanley has maintained an overweight rating on Tata Motors with a target price of Rs 1,013.

Mentioning a JLR Q4 sales and global EV slowdown, the brokerage in its report said, "Slower EV adoption is a positive for the free cash flow (FCF) outlook and capital return profile." A fast EV transition could have been highly disruptive for business, according to Morgan Stanley.

CLSA and Macquarie each have retained an outperform call on the auto stock with targets of Rs 1,133 and Rs 1,028, respectively.

JLR Q4FY24-modest beat on wholesale, said CLSA in its note.

According to CLSA, the earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin could be flattish quarter-on-quarter (QoQ) given a 100-bps decline in the share of premium models.

The brokerage at CLSA believes Tata Motors will achieve its targeted net debt reduction for FY24.

On the other hand, HSBC has continued with a hold call. The brokerage has raised the target to Rs 1,000 from Rs 920.

Tata Motors share price history

Tata Motors has risen nearly 120 per cent in the last one year, outperforming a 75 per cent rally in the NiftyAuto and a nearly 29 per cent gain in the Nifty50.

(with agency inputs)

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