Shares of Indian automaker Tata rose as much as 8.15% to a seven-month high on Monday after its luxury car unit Jaguar Land Rover (JLR) reported strong fourth-quarter sales and forecast free cash flow of about $1bn (roughly R18.3bn).
Tata shares were the top gainer on India's blue chip Nifty 50 index, which was up 0.33%, and pushed the auto index up 1.16%.
JLR, on Thursday, reported a 24% jump in its wholesale volumes, excluding from China, in the January-March quarter, while retail sales grew 30% as chip and other supply constraints eased. Tata's global wholesales rose 8% in the quarter.
JLR's sales contribute nearly 60% of Tata's revenue from operations and the British automaker's strong sales in the October-December quarter had lifted the group to its first profit in two years.
“The market is underestimating JLR's EBIT (earnings before interest and tax) margin potential from upcoming phase of wholesale volumes,” Goldman Sachs said in a note.
The brokerage raised its recommendation on Tata's stock to “buy” from “neutral” to factor in JLR's improving volume outlook, and raised its target price on the stock to 550 rupees.
The average rating of the 32 analysts covering the stock is “buy” and their median price target is 520 rupees, according to Refinitiv data.
Tata's stock hit a high of 473.30 rupees (roughly R105) on the day, before giving up some gains to trade up about 6% at 463.75 rupees (roughly R103) in early afternoon trading.
“We remain confident of strong volume recovery and free cash flow generation in JLR, improving margins in the commercial vehicle business, and the ramp-up of electric vehicle volumes in the domestic passenger vehicles business,” Axis Capital said.
Tata jumps to seven-month high on strong Q4 JLR sales
Image: ©topdeq/123RF.COM
Shares of Indian automaker Tata rose as much as 8.15% to a seven-month high on Monday after its luxury car unit Jaguar Land Rover (JLR) reported strong fourth-quarter sales and forecast free cash flow of about $1bn (roughly R18.3bn).
Tata shares were the top gainer on India's blue chip Nifty 50 index, which was up 0.33%, and pushed the auto index up 1.16%.
JLR, on Thursday, reported a 24% jump in its wholesale volumes, excluding from China, in the January-March quarter, while retail sales grew 30% as chip and other supply constraints eased. Tata's global wholesales rose 8% in the quarter.
JLR's sales contribute nearly 60% of Tata's revenue from operations and the British automaker's strong sales in the October-December quarter had lifted the group to its first profit in two years.
“The market is underestimating JLR's EBIT (earnings before interest and tax) margin potential from upcoming phase of wholesale volumes,” Goldman Sachs said in a note.
The brokerage raised its recommendation on Tata's stock to “buy” from “neutral” to factor in JLR's improving volume outlook, and raised its target price on the stock to 550 rupees.
The average rating of the 32 analysts covering the stock is “buy” and their median price target is 520 rupees, according to Refinitiv data.
Tata's stock hit a high of 473.30 rupees (roughly R105) on the day, before giving up some gains to trade up about 6% at 463.75 rupees (roughly R103) in early afternoon trading.
“We remain confident of strong volume recovery and free cash flow generation in JLR, improving margins in the commercial vehicle business, and the ramp-up of electric vehicle volumes in the domestic passenger vehicles business,” Axis Capital said.
READ MORE
One-minute battery swaps are spurring EV adoption in Asia
Tesla to build new Shanghai factory for Megapack battery
Toyota to launch 10 new battery electric vehicles by 2026
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most read
Latest Videos