Tata Motors has made a remarkable recovery in the second quarter of FY24, registering a net profit of ₹3,764 crore, a significant upturn compared to a loss in the same quarter last year. The company’s revenue witnessed a 32% hike, reaching ₹1.05 lakh crore.
Jaguar Land Rover (JLR), the luxury car subsidiary, played a pivotal role in this resurgence, posting a 30.4% year-on-year revenue increase. Its remarkable performance was attributed to strong wholesales, an improved product mix, and strategic cost reductions. The unit also achieved a record first-half revenue of £13.8 billion, marking a 42% year-on-year growth.
This impressive comeback by Tata Motors caught the attention of global brokerages. Jefferies anticipates an even brighter H2 for JLR, owing to an increase in volumes and the heightened production capacity for the Range Rover models. The brokerage firm suggests a target price of ₹800 for the Tata Motors stock, indicating a potential rise of nearly 28%.
Further bolstering Tata Motors’ domestic presence, the company announced the commencement of car production from their newly acquired Sanand 2 facility by Q4 FY24. This facility, acquired from Ford India, will increase Tata Motors’ annual production capacity by 30,000 units, making the total annual capacity soar to 85,000 units.
The company’s Chief Financial Officer, P.B. Balaji, expressed confidence in sustaining the momentum in the coming quarters, attributing the success to a well-defined strategy and robust product pipeline.
Morgan Stanley and CLSA also maintain a positive stance on Tata Motors, emphasizing its debt reduction and market share gains in the domestic passenger vehicle business. “The company is well-poised for a healthy recovery as various challenges stabilize”, noted Motilal Oswal.
Tata Motors’ shares rose to ₹666 apiece on November 3, rewarding investors with a 36% return over the past six months.
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