Tata Motors’ share price jumped up over 4% on Friday morning to hit an intraday high of ₹666.

What Happened: The Tata Group company reported its earnings for the September quarter in the after-market hours on Thursday. The auto giant’s consolidated net profit stood at ₹3,764 crore mostly in line with consensus estimates. The company had reported a net loss of ₹944 crore in the same quarter a year ago.

The company’s revenue from operations stood at ₹1.05 lakh crore, reflecting a 32% increase from the ₹79,611 crore reported in the year-ago period. The EBITDA for the quarter was at ₹13,767 crore, surging from ₹5,571 crore in the same quarter last year. EBITDA margin for the quarter was at 13.1%.

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Tata Motors’ luxury subsidiary, Jaguar Land Rover (JLR), reported a revenue increase of 30.4% to £6.9 billion, with an EBITDA margin of 14.9%. The company has raised its guidance for JLR EBIT margins for FY24 to 8% from the previous 6% estimate. Tata Motors anticipates a free cash flow of over £2 billion in FY24 and expects its net debt to decrease to less than £1 billion by the end of FY24.

Despite external challenges, Tata Motors remains optimistic about demand and foresees a moderate inflationary environment. The company is aiming for a strong second half (H2) with robust demand for JLR models, heavy commercial vehicle trucks, and new-generation passenger vehicles.

Tata Motors also reported a reduction in its net automotive debt, which now stands at ₹38,700 crore. It was at around ₹43,700 crore at the end of March 2023.

Analysts Reactions: CLSA maintained its “buy” call on the stock with a target price of ₹803. The brokerage said that the company showed good business momentum in the September quarter. Jefferies also maintained its “buy” rating on the stock with a target price of ₹800. Morgan Stanley also remained “overweight” on the stock with a price target of ₹711.

Price Action: Tata Motors’ share price was up 2.80% to trade at ₹654.25 at open on Friday.

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