Tata Motors Shares Jump As JLR Sales Numbers Come In

Tata Motors continued to make gains for the second straight session on Tuesday going up close to 1.5%.

What Happened: The Tata Group company said that Jaguar Land Rover (JLR) retail sales grew by 11% year-on-year to 1.14 lakh units in the quarter ended March. This growth was driven by increased production and sustained global demand for JLR vehicles, the company added.

During the January-March period, retail sales saw significant increases in various regions compared to the previous year. Sales in the UK rose by 32%, while North America saw a growth of 21%, and overseas markets witnessed a 16% increase. However, sales in China declined by 9%, and there was a 2% decrease in Europe.

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For the full year ending March 2024, JLR’s sales recorded a 20% year-on-year increase, with wholesale volumes reaching 4.01 lakh units (up 25%) and retail sales totalling 4.31 lakh units (up 22%). In the fourth quarter, wholesale volumes stood at 1.10 lakh units, representing a growth of 16% compared to the same period last year.

Brokerage Reactions: According to Morgan Stanley maintained its “Overweight” rating on the auto giant with a target price of ₹1,013. The brokerage highlights factors such as Jaguar Land Rover’s (JLR) Q4 sales and a global slowdown in electric vehicle (EV) adoption. Morgan Stanley views slower EV adoption as a positive for Tata Motors’ free cash flow (FCF) outlook and capital return profile, suggesting that a fast EV transition could have been highly disruptive for the business.

Macquarie also maintained its “overweight” rating for the stock with a price target of ₹1,028. The analysts said that JLR sales achieved a modest beat on wholesale figures. The brokerage firm said that the EBITDA margin could be flat quarter-on-quarter (QoQ) due to a decline in the share of premium models and higher incentive spend.

Price Action: Tata Motors’ share price was up 1.31% to trade at ₹1,026.50 as the markets opened on Tuesday.

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