India’s Passenger Cars and Utility Vehicles sector is a key driver of the automotive industry, accounting for over 13% of GDP. In FY 2023, over 3.9 million passenger cars and 1.6 million utility vehicles were sold. Rising incomes and urbanization fuel demand, positioning India as a major global market.
With a market capitalization of Rs 3.60 lakh crore, the shares of Tata Motors Ltd were trading at Rs 980.95 per share increasing around 5.26 percent as compared to the previous closing price of Rs 1,035.45 apiece.
Financial analysis:-
Looking forward to the company’s financial performance, revenue grew 10 percent from Rs 1,02,236 crore in Q1FY24 to Rs 1,08,048 crore in Q1FY25, and during the same period of time, net profit grew percent from Rs 3,301 crore to Rs 5,692 crore.
Brokerage recommendation:-
UBS, one of the well-known brokerages globally, gave a ‘sell’ call on the auto stock with a target price of Rs 825 apiece, indicating a potential downside of 16 percent from Wednesday’s price of Rs 980.95 per share.
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Brokerage views:-
The brokerage remains cautious, believing that the long-running performance of JLR’s premium models Defender, Range Rover, and Range Rover Sport—has begun to slow. It stated that the order book for this trio has now returned to pre-COVID levels, and Range Rover discounts are expected to climb soon.
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Additionally, the strong sales of JLR’s premium models have so far boosted the average selling price for Tata Motors, and hence concerns over a moderation in demand may impact its margin performance. Furthermore, UBS warned that there is further downside risk from margin slippage at the company’s premium unit Jaguar Land Rover, and in the domestic passenger car category.
Company snapshot:-
Tata Motors Group is a top worldwide automaker. As part of the legendary multinational corporation, the Tata group, it provides the globe with a diversified portfolio of automobiles, sports utility vehicles, trucks, buses, and defense vehicles.
Written by:- Abhishek Singh
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