Tata Motors Ltd experienced a turbulent trading session as its shares plummeted over 9% following the release of its March 2024 quarter results. While the company reported a remarkable 222% YoY surge in consolidated net profit, reaching Rs 17,407 crore, and a 13% increase in revenue to Rs 1.2 lakh crore, it fell short of Q4 estimates on revenue and Ebitda fronts. The weak guidance for Jaguar Land Rover (JLR) further dampened investor sentiment.
Analysts have divergent views on Tata Motors’ future trajectory. Kotak Institutional Equities remains cautiously optimistic, expecting moderate growth in FY25 amidst concerns about weakening demand. Meanwhile, Motilal Oswal Financial Services downgraded its rating to ‘neutral’, citing anticipated challenges in JLR’s margins and a bleak outlook for the Indian business.
Nuvama Institutional Equities predicts single-digit growth in FY25 due to order book exhaustion and challenges in the Indian commercial vehicle segment. Conversely, JM Financial maintains a ‘buy’ rating, highlighting the potential of new launches in the domestic passenger vehicle segment and an anticipated pickup in commercial vehicle demand.
Global brokerage firms also weigh in, with Nomura downgrading Tata Motors to ‘neutral’ but acknowledging its fair value, while JPMorgan and Jefferies express bullish sentiments with raised target prices. On the contrary, Morgan Stanley downgrades the stock to equal-weight.
Despite the mixed reactions, Tata Motors remains focused on improving margins, generating strong free cash flow, and advancing its electrification efforts, aiming to achieve a net cash position by FY25.
