Can Tata Motors regain its momentum amid downward pressure in the auto sector?
Can Tata Motors regain its momentum amid downward pressure in the auto sector?
Tata Motor’s share price rose on Monday following positive management guidance. Despite Q2 being below estimates, the stock price has shown positive movement. The company maintains an optimistic H2 FY25 outlook.
Share Price Movement
The share price of Tata Motors Limited went up by 2.9 percent to Rs. 828.8 per share on Monday, an increase from its previous close of Rs. 805.4 per share. The market capitalisation now stands at approximately Rs. 3,02,301 crore as of November 11, 2024.
Management Guidance
Management expects strong performance in H2 FY25, with JLR wholesales projected to improve significantly as supply constraints ease. For PVs, the festive season demand and infrastructure investments are anticipated to drive growth. As quoted by CFO PB Balaji, “business fundamentals remain strong” despite external challenges, and the company is “confident of steady improvement” in performance. The JLR segment of the company has set an ambitious target to become net debt-free by FY25.
Q2 Financial Highlights
According to its recent filing, in the quarter ending September 2024, Tata Motors Limited’s consolidated revenue from operations has decreased by 3.5 percent YOY from Rs. 1,05,129 crore in Q2 FY24 to Rs. 1,01,450 crore in Q2 FY25 and declined by 6.1 percent QoQ from Rs. 1,08,048 crore in Q4 FY24.
The company’s consolidated net profit has reduced by 9.9 percent, from Rs. 3,832 crore in Q2 FY24 to Rs. 3,450 crore in Q2 FY25. As compared to the last quarter of 2025, the company’s net profit has been reduced by 39.3 percent QoQ from Rs. 5,692 crore.
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Price Targets
Nomura maintained its ‘Buy’ rating but lowered the target to Rs 900 from Rs 1,303, citing Q2 weakness. They remain optimistic due to JLR’s strong H2FY25 outlook, expected CV recovery, and JLR’s market-leading performance across regions.
Jefferies kept its ‘Buy’ rating while adjusting the target to Rs 1,000 from Rs 1,330. Their analysis notes JLR’s positive H2 outlook and maintained margin guidance, but reduced earnings estimates by 2-9% due to slowing Indian CV and PV demand.
Shareholding Pattern
As of the November 2024 shareholding pattern, Tata Motors Limited is primarily held by the promotors at 42.58 percent, foreign institutional investors hold 20.54 percent, and the public with 20.49 percent.
About Company
Founded in 1945, Tata Motors Ltd, headquartered in Mumbai, Maharashtra, has become a global powerhouse in the automotive industry. Part of the renowned Tata Group, Tata Motors serves various segments, including passenger, commercial, and defence vehicles, positioning itself as a major player in India and beyond. The company boasts a market capitalisation of approximately ₹3.02 lakh crores and employs around 91,496 individuals worldwide.
Tata Motors offers a diverse product portfolio, including popular passenger cars like Tata Nexon and Harrier, a wide range of commercial trucks and buses, and a growing lineup of electric vehicles (EVs). Through its luxury subsidiary Jaguar Land Rover (JLR), Tata also competes in the high-end market. Its operations span over 175 countries, supported by R&D centres driving innovation in automotive technology and sustainability.
With strong commitments to EV advancements and sustainability, Tata Motors remains a key player in the industry, striving to expand its global presence and meet evolving consumer needs.
Written By Fazal Ul Vahab C H
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