 "Tata motors")
Tata Motors’ market capitalisation (market cap) crossed Rs 3 trillion after the stock price of the company along with Tata Motors DVR hit a new high on the bourses.
A combined market cap of Tata Motors (Rs 273,985 crore) and Tata Motors DVR (Rs 27,940 crore) touched Rs 3.02 trillion in intra-day trade today. Shares of Tata Motors (Rs 825.15) and DVR (Rs 549.50) are up 1.5 per cent, hitting a new high. In comparison, the S&P BSE Sensex was down 0.13 per cent at 73,231 at 09:28 AM.
Tata Motors today became the third Tata group company after Tata Consultancy Services (Rs 14.18 trillion) and Titan Company (Rs 3.34) to top the Rs 3 trillion market cap. In the overall market cap ranking Tata Motors stands at 22nd position, the BSE data shows. Meanwhile, Maruti Suzuki India’s has a market cap of Rs 3.19 trillion data shows.
In past three months, Tata Motors has outperformed the market by surging 24 per cent on expectation of strong earnings growth. Thus far in the month of January, the stock has gained 6 per cent after recording better-than-expected December volumes in its UK-based subsidiary Jaguar Land Rover (JLR).
Tata Motors, was also the sole company from the S&P BSE Sensex and Nifty 50, which saw its market price double in the calendar year 2023.
The outperformance of Tata Motors to the overall market has been is on the back of healthy volumes in its UK-based subsidiary JLR. This coupled with gradual recovery in the global passenger vehicle demand, improving profitability due to product mix and lower commodity costs are expected to be key positives for the company, according to analysts.
The order book continues to reflect strong demand for JLR products with 148,000 client orders at the end of the December quarter (Q3FY24). This has reduced from 168,000 at the end of September quarter (Q2FY24), reflecting increased order fulfilment to clients and resulting in improved client waiting times for the company’s highly desirable vehicles. Demand for Range Rover, Range Rover Sport and Defender remains particularly strong, representing 76 per cent of the order book, Tata Motors said.
The year-on-year (YoY) growth trend of the company’s commercial vehicle (CV) segment witnessed during past quarters paused in Q3FY24 on account of the higher base effect, impact of elections held across 5 states, and the post festive seasonal slowdown in rural consumption. Going forward, the management expects demand to improve in March quarter (Q4FY24) across most segments of the CV industry due to the government’s continuing thrust on infrastructure development, the promising growth outlook of the economy and the company’s demand-pull initiatives.
The passenger vehicle (PV) industry is expected to post its highest-ever sales in the calendar year 2023 (CY23), crossing the significant 4 million mark, supported by a strong supply situation, new nameplates launched in the SUV segment, and a robust demand during the longer festive period.
For Tata Motors, CY23 was the third consecutive year of posting highest-ever sales of 553,000, led by its commanding position in the compact SUV segment and strong growth in hatches, despite the hatch segment degrowing at an industry level.
Going forward, with multiple new products, including a new nameplate scheduled for launch in CY2024, the management remain optimistic about continuing the growth trend in the quarters ahead.
Tata Motors is looking at a strong H2FY24E (October to March) and beyond due to improvements in all 3 business verticals. JLR will see higher volumes, and an improved product mix leading to a higher EBIT margin guidance for FY24E. Tata Motors-CV will continue to see double-digit EBITDA margins backed by strong realizations. The Tata Motors-PV margins are likely to improve due to new product launches done recently and improvements in EV margins. With all 3 businesses firing in the right direction, Tata Motors is well poised to deliver a solid performance going ahead, according to analyst at KRChoksey Shares and Securities.
Meanwhile, Tata Motors on Monday announced that a meeting of the board of directors of the company is scheduled to be held on February 2, 2024 to consider and approve the audited financial results for the third quarter and nine months ended December 31, 2023.
