Tata Motors up 3%, Tata Motors DVR hits 52-week high ahead of Q4 results

Last week, rating agency Moody's had upgraded the outlook on TML from "negative" to "stable" due to continued recovery in the firm's consolidated revenue and profitability

Shares of Tata Motors, on Tuesday, were up 3 per cent to Rs 332, while Tata Motors DVR (differential voting rights shares) hit a fresh 52-week high of Rs 156, up 3 per cent on the BSE in intra-day trade on Tuesday ahead of its January-March quarter (Q4FY21) earnings today. Tata Motors share hit a 52-week high of Rs 357 on March 3, 2021.

In today's meeting, the board would also consider a proposal for raising funds by way of issue of one or more instruments including convertible securities of any description or debt securities, through preferential issue, private placements, rights issue or any other methods or combination thereof in the domestic and/or international markets.

In the past two trading days, the stock of Tata Motors (TML) has risen 6 per cent rating agency Moody’s upgraded the outlook on TML from “negative” to “stable” due to continued recovery in the firm's consolidated revenue and profitability.

The recovery is from the trough during the pandemic in the first quarter of the fiscal year ended March 2021. It is expected to sustain over the next 12-18 months, along with strengthening of TML's credit metrics, according to Moody's.

Moody's expects TML's wholly-owned UK subsidiary, Jaguar Land Rover Automotive Plc (JLR) to deliver credit metrics appropriate for its B1 rating during the fiscal year ending March 2021 (fiscal 2021) and to sustain the improving trajectory.

JLR's restructuring efforts and its solid growth in China, as well as the recovery in other key markets such as Europe and North America over the coming quarters, will improve its profits and leverage, believes Moody’s. JLR's restructuring efforts and its solid growth in China, as well as the recovery in other key markets such as Europe and North America over the coming quarters, will improve its profits and leverage. Given these large contributions, JLR's improving credit metrics have a direct and immediate impact on TML’s consolidated metrics and influences its credit profile. CLICK HERE FOR FULL REPORT

Meanwhile, brokerage firm ICICI Securities expects Tata Motors to report muted Q4FY21 numbers despite a sequential uptick in volumes at both JLR & standalone operations primarily tracking pressure on gross margins due to a rise in input costs and already disclosed exceptional charge (restructuring cash and non-cash costs) amounting to £1.5 billion at JLR.

Tata Motors expects commercial industry sales to grow at 30 per cent plus in FY22E, driven by a sharp recovery in the medium & heavy commercial vehicle (MHCV) segment. The OEM will continue to outpace the passenger vehicle (PV) segment in FY22E as well, driven by new launches and product traction for existing products, HDFC Securities said in a report.

JLR has a comprehensive electric vehicle (EV) strategy and will transform its entire portfolio to Battery Electric Vehicle (BEV), with the glide path towards an electric portfolio by 2030. While the Plugin hybrids are already launched, Jaguar will completely migrate to BEVs in the future, the brokerage firm said.