Tata Motors shares increased by nearly eight percent on April 10 after Goldman Sachs upgraded the automaker in response to excellent JLR results for the first quarter of 2023.
The brokerage has also increased the 12-month price target from Rs 480 to Rs 550, representing a 26 percent increase from the closing price on April 6. It stated that it has elevated the stock to “buy” in light of JLR’s improved outlook.
JLR wholesale volumes for the March quarter stood at 94,649 units (excluding the Chery Jaguar Land Rover China joint venture), up 19 percent from the prior quarter ending 31 December 2022 and 24 percent from the same quarter one year prior.
Wholesale volumes rose in all markets, led by overseas (62%), UK (24%), Europe (22%), China (17%), and North America (12%). 2 percent.
In addition, Jaguar Land Rover anticipates a free cash flow of over 800 million pounds (approximately $1 billion) for the fourth quarter, aided by a 24 percent increase in wholesale volumes and the easing of semiconductor and other supply constraints. Tata Motors, which acquired the British automaker in 2008, had set a free cash flow target for the fiscal year of 1 billion pounds.
BoFA Securities has maintained its buy rating on Tata Motors with a price target of Rs 475, citing fourth-quarter volume strength. It indicated that JLR’s free cash flow was superior. According to BoFA, the current risk-reward ratio is favorable.
The analysts’ commentary follows the automaker’s announcement of its sales for the March-ending quarter.
In the fourth quarter of fiscal year 23 Tata Motors reported global wholesales of 3,61,361 units. In January through March of this year, global wholesales of all commercial vehicles and Tata Daewoo models were 1,18,321 units, a 3% increase over the same period in FY22.