Reviews

Published: Jan 30, 2023
Updated: Jan 30, 2023

Tata Motors' Q3 Earnings Beat Expectations, Stock Soars 7%

Tata Motors, one of India's leading automobile manufacturers, has reported a strong Q3 performance for the fiscal year ending 2023. The company posted a consolidated net profit of Rs 2,957.71 crore for the quarter ended December 2022, a significant increase from the loss of Rs 1,516.14 crore in the same quarter the previous year. This marks the end of a seven-quarter streak of losses for the company, and in response, the stock has risen by 7% on the National Stock Exchange.

Outlook for the Company:

Experts view the company's Q3 performance as a positive indication of a turnaround for Tata Motors. Sharekhan, a leading brokerage firm, has maintained a "Buy" rating on the stock with an unchanged price target of Rs 516. They believe that the company is witnessing robust demand and is expected to deliver better operational efficiencies, aided by aggressive launches, market positioning, product differentiation, cost savings, and investments in research and development (R&D). Nomura, another research firm, has also kept a "Buy" rating on the stock with a target at Rs 508 per share.

New Developments:

The company's Q3 margin has improved across segments, with its Jaguar Land Rover (JLR) division expected to benefit from rising chip supply and India CV strategy to reduce disc working well. The company management has stated that JLR Q4 volumes may be 85,000 and improve further in FY24. Jefferies, a brokerage house, has maintained a "Buy" rating on the stock and raised the target price to RS 565 per share. They expect lower net loss in FY23 and have raised FY24-25 EPS by 3-5 percent.

Outperforms Competitors

Tata Motors competes with other major players in the Indian automobile market such as Maruti Suzuki, Mahindra & Mahindra, and Ashok Leyland. However, the company's Q3 performance has set it apart from its competitors, with its stock rising significantly higher than its peers.

Positive Outlook Ahead

An analysis of the company's financials shows a strong improvement in its operating margin and return on equity. The company's revenue from operations came in at Rs 88,488.59 crore, up 22.51 percent from Rs 72,229.29 crore in the same quarter last year. This, along with the company's strong performance in Q3, suggests that Tata Motors is on a strong growth trajectory and that the stock is a good investment opportunity.