Domestic carmaker Tata Motors Ltd beat expectations to report first profit in seven quarters on improving semiconductor chip supply and rising demand, helping its luxury car unit Jaguar Land Rover (JLR) turn a profit. got help. It is the consolidated net profit of the consolidated net profit 3,043 crore in the December 2022 quarter (Q3 FY23) as against a net loss of Rs. 1,451 crore in the October-December quarter of the last financial year.
“JLR maintained its 4Q guidance and expects chip shortages to gradually ease. It has a strong order book with 74% orders for the new RR, RR-Sport and Defender. We now expect a lower net loss in FY23 and increase FY24-25E EPS by a marginal 3-5%. Despite near-term pressures at JLR, we like Tata given the cyclical recovery and improved franchise in India, early leadership in India EVs, and JLR focusing on higher-margin Land Rover models. We maintain the target price of Tata Motors with Buy 565 (before 540 pt),” said brokerage Jefferies.
JLR posted profit before tax of 265 million pounds ($326.2 million) in the third quarter, compared with a loss of 9 million pounds a year earlier, helped by higher sales and an improved product mix and pricing.
Tata Motors (TML) to EBITDA of Rs 96 billion in Q3FY2023, beating Edelweiss estimates by 20% as margins staggered positively. Q3 compensates for Q2’s 28% miss. “Despite the weak performance of Q2, we have largely maintained our estimates on expectation of commodity and mix gains. However, we are disappointed with the weak JLR volume ramp up commentary and this remains the foremost watchable,” the brokerage said.
“While the demand outlook for JLR (due to production constraints) remains strong, early signs of moderation were indicated by the management for PV (high time to inquiry for retail) as well as ILCV and SCV. We expect this to be offset by commodity benefits. India and JLR have favorable cyclical recovery and product-cycle headwinds. This should help improve the balance sheet – a key driver of our Braveheart call,” said Edelweiss while maintaining ‘Buy’ with SoTP-based target price 502 per share.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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