The shares of Tata Motors Limited were trading 2.3 per cent up at Rs 469 levels in the early trading hours on Friday. In a month the stock has zoomed by more than 6.5 per cent. However, so far this year the stock has been volatile and shed more than 5 per cent YTD.
In Q1FY23, the company earned a total revenue of Rs 71,934 crores up 8 per cent from the same period last year when it earned Rs 66,406 crores. However, its revenue declined from the previous quarter’s revenue of Rs 78,439 crores.
Their consolidated net losses widened to Rs 4,987 crores in the quarter under review as against a loss of Rs 4,320 crores which it earned in Q1FY22. In the previous quarter, their net losses stood at Rs 1,099 crores.
The major reason was the slump in the sales of its premium brand JLR. The sales were 37 per cent down this quarter compared to the year-ago period.
ICICI Securities is bullish on the stock and has a ‘Buy’ tag with a target price of Rs 646 per share which represents an upside of 38 per cent from the current levels.
“With an outlook suggesting 90k units in Q2, we believe JLR is on course to compensate for its Q1 underperformance. Besides, improvement in scale and mix and rationalisation in input material costs should take care of margin recovery and mitigate energy cost inflation. We also believe wholesales of 30k units per month in the coming months would be good enough for JLR to meet its GBP1 billion FCF guidance for FY23, with its FCF breakeven volumes being at 25k units/month.” said ICICI securities.
Tata Motors Limited, part of the Tata Group, is an Indian multinational automotive manufacturing company. The company produces passenger cars, trucks, vans, coaches, buses, luxury cars, sports cars, and construction equipment. It is also the leader in the Electric Vehicle (EV) space in India.
Written by Anoushka Roy
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