Tata Motors shares hit 52 week high after JLR posts 27% yoy increase in sales

Shares of jumped over 3% to 809.20 per share, to hit 52 week high on Tuesday, January 9, propelled by robust performance from Jaguar Land Rover (JLR), which reported its most substantial wholesale figures in 11 quarters during the October December period. The company's luxury car division, JLR, recorded a 27 percent growth in vehicle sales during the December quarter of the fiscal year 2024 compared to the corresponding period in the previous year.

Also read: By 2 pm, the NSE witnessed a trading volume exceeding 1.06 crore shares, with a corresponding traded value totaling 851.40 crore. Broking firm Morgan Stanley, while giving ‘overweight’ tag said, “JLR could be the next big re rating driver for Tata Motors if performance is steady." The broking firm further gave the target price of 890 per share, implying an upside of 10% from current level.

Meanwhile, Motilal Oswal reaffirmed its recommendation ‘buy’ on Tata Motors stock, setting a price target of 800. This represents a 14% potential upside from the Monday closing price of 789. Also read: According to Motilal's stock analysis, Jaguar Land Rover (JLR) is anticipated to sustain a robust recovery, while the growth trajectory for Tata Motors' passenger and commercial vehicle segments is expected to moderate in the upcoming years.

This shift is attributed to a return to a normal base and a slowdown in the lower end of the passenger vehicle (PV) and light commercial vehicle (LCV) markets. JLR reported wholesale volumes of 101,000 units, marking a 27 percent year on year increase, a performance that aligns closely with analysts' expectations, according to Morgan Stanley.

In the third quarter, the product mix remained robust, with Range Rover, Range Rover Sport, and Defender contributing to 62 percent of the total wholesale figures. Although the company did not provide specific comments on free cash flow (FCF), the brokerage expressed confidence in the sustained positive momentum of JLR's FCF.

For the fiscal year 2024, JLR's wholesales have reached 290,000 vehicles so far, exhibiting a 28 percent surge compared to the corresponding period last year. The order book underscores persistent strong demand for JLR products, with 148,000 client orders recorded at the close of the third quarter.

Also read: Year on year, retail volumes witnessed growth across all regions, with the UK experiencing a 55 percent increase, overseas markets seeing a 49 percent uptick, China registering a 28 percent rise, Europe showing a 27 percent climb, and North America posting a 6 percent expansion. Over the last month, the stock has witnessed a remarkable surge of more than 12%, outpacing the modest 4% increase observed in the Nifty auto index.

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