Tata Stock Hits All-Time After Q3 — Brokerages Raise Target Price Even Higher

Tata Motors‘ share price surged on Monday morning after the auto giant’s December quarter results beat all estimates.

What Happened: Tata Motors reported a surge in consolidated net profit in the quarter ended December, which increased by 137.5% to ₹7,025.11 crore compared to ₹2,958 crore in the year-ago period. The number beat all street estimates of around ₹4,400 crore.

Tata Motors’ revenue for the October-December period, grew by 24.9% year-on-year increase to ₹1.10 lakh crore, compared to ₹88,489 crore in the corresponding period last year. The number was mostly in line with street estimates

Tata Motors EBITDA rose by 42.5% year-on-year to ₹15,333 crore. The operating margin expanded by 171 basis points to 13.94%. The company’s revenue from its luxury car subsidiary, Jaguar Land Rover (JLR) reached ₹76,665 crore in the last quarter, compared to ₹58,863 crore in the December 2022 quarter.

The Tata Group company expects performance to further improve in Q4 due to seasonality, new product launches, and improving supplies at JLR. Additionally, Tata Motors achieved a net debt reduction of ₹9.5K crore in Q3 and remains confident in achieving its deleveraging plans. The company’s net debt stands at around ₹29,200 crore.

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Analyst Reactions: CLSA maintained its “buy” rating for the stock raising the price target to ₹1,061 from ₹955. The global brokerage firm said that JLR reported string numbers and the company’s commercial vehicles division beat estimates on margin.

Macquarie also maintained its “outperform” rating for the stock raising the target price to ₹1,028 from ₹921. The brokerage noted that the company’s three businesses (JLR, Commercial Vehicles and Passenger Vehicles) all reported margin improvement in the December quarter.

Goldman Sachs also maintained its “buy” call for the stock raising the price target to ₹960 from ₹870. The analysts said that the company posted better-than-expected results for the December quarter.

Motilal Oswal also maintained its “buy” rating for the stock with a target price of ₹1,000. The domestic brokerage said that the company EBITDA and net profit beat its estimates.

Emkay maintained its “add” rating for the stock raising the price target to ₹925 from ₹900. The brokerage said that the company achieved healthy margin expansion across businesses and also highlighted the reduction in net debt.

Jefferies also maintained its “buy” rating for the stock raising the price target to ₹1,100 from ₹950. The research firm said that the company remains the preferred pick in the four-wheeler OEM (original equipment manufacturer) segment.

Price Action: Tata Motors’ share price was up 5.99% to trade at ₹931.40 as the markets opened on Monday. The stock surged up over 6% to hit an alll-time of high of ₹934.

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