E-Paper
Tata Motors shares rise10% on robust Q4 earnings
Shares of the country’s largest automaker by revenue, Tata Motors, jumped 10% on the Bombay Stock Exchange on Tuesday in the morning trade as investors cheered the company’s three-fold rise in the fourth quarter consolidated net profit.
Shares of the country’s largest automaker by revenue, Tata Motors, jumped 10% on the Bombay Stock Exchange on Tuesday in the morning trade as investors cheered the company’s three-fold rise in the fourth quarter consolidated net profit.
Driven by strong global retail sales growth at luxury Jaguar Land Rover (JLR) unit, and continued pickup in the truck sales back home, Tata Motors’ January-March quarter net profit surged to Rs 5,177 crore against Rs 1,717 crore during the same period last year.
Tata Motors’ medium and heavy truck sales in the domestic market rose 27% during the quarter under review, which boosted EBITDA (earnings before interest, taxes, depreciation and amortisation) margin to 8.1%, a 16-quarter high.
“We expect the momentum in MHCV (medium and heavy commercial vehicles) volumes to continue in 2016-17, while light commercial vehicle volumes have showed signs of recovery. We expect recovery to strengthen in the second half of 2016-17. We believe new launches in the UV (utility vehicles) space (will) arrest the decline in the domestic passenger vehicle business,” said Jinesh Gandhi, analyst at Motilal Oswal, maintaining a “buy” rating.
The brokerage expects 26% compounded growth in Tata Motors’ passenger vehicle volumes over 2016-18, compared with 17% compounded de-growth over 2012-15.
JLR’s retail sales surged 28% to 158,813 units in the fourth quarter and operating margin was at 16.2%.
“Overall a stellar performance with JLR margin surprising despite weak product mix, this coupled with continued improvement in volumes should allay investor anxiety,” said an official from brokerage Phillip Capital.
Tata Motors shares opened at Rs 456.30 and were trading at Rs 456.35, up 8.6%. It hit a high of Rs 463.90 in the morning trade.
