According to a few brokerages, who increased share price predictions for the firm following March quarter results, Tata Motors recorded a beat on Q4 Ebitda, as JLR margin surprised pleasantly on better product mix and reduced input costs. While retaining their favourable outlook on the Tata group shares, analysts primarily envisage JLR production ramping up, a resurgence in domestic commercial vehicle (CV) sales, and a reduction in debt.

In-depth details about Share price targets for Tata Motors have been updated higher

Nomura India increased its stock price forecast from Rs. 508 to Rs. 610. The statistics for Nomura were largely in line with expectations. It said that Tata Motors’ consolidated Ebitda exceeded the estimate of the Bloomberg consensus but was broadly in line with its expectation. It stated that margins might increase across all business areas and that a significant driver of the stock price would be debt reduction.

Jefferies boosted its price objective on Tata Motors to Rs. 665, Goldman Sachs increased its price goal on the stock to Rs. 600, and JPMorgan raised its price target on the stock to Rs. 455. The CLSA increased its price estimate for Tata Motors from Rs. 544 to Rs. 624.

According to Nuvama Institutional Equities, the ramp-up of JLR production and the sizable backlog of orders (200,000 units), particularly for the new Defender, Range Rover, and Range Rover Sport models, would likely be the main drivers of volume growth. The firm expects JLR’s volume to grow by 13% between FY23 and FY25E.

The brokerage added a recovery in domestic CV volumes is anticipated to improve in India operations.

government pressure on infra spending and replacement demand in macroeconomics. According to the report, domestic PV volumes could keep increasing moderately in FY23–25E, with EV demand and marketing initiatives playing a key role.

The company raised its share price objective from Rs. 565 to Rs. 625, noting that it was motivated by prospects of a cyclical upturn in the JLR and India CV/PV markets, considerable margin expansion, and debt reduction.

Tata Motors had on Friday announced a second consecutive quarterly profit, aided by price increases and robust demand for both commercial trucks and vehicles from its luxury Jaguar Land Rover (JLR) stable. In comparison to the same quarter a year prior, the company reported a net profit of Rs 5,408 crore during the January to March quarter.

The company’s operating revenue increased 35% to Rs. 1.06 lakh crore in Q4FY23 from Rs. 78,439 crore in Q4FY22.

According to Motilal Owsal Securities, it has increased its forecasts for consolidated earnings per share (EPS) by 13% for FY24 and 6% for FY25 to account for JLR’s volume ramp-up, a lowering of some costs, and improved margins in the Indian market. The stock’s target price according to this brokerage is Rs 590.

According to Motilal Oswal, Tata Motors should have a robust comeback as supply-side difficulties (for JLR) resolve and commodity headwinds (for the India division) moderate. The company-specific volume/margin drivers, the CV upcycle, a significant improvement in free cash flow (FCF), as well as a decrease in net debt in both the JLR and the India businesses, will all be advantageous to it.

Tata Motors provided a consistent set of financial results, according to Kotak Institutional Equities, with JLR and domestic CV business Ebitda meeting expectations. Due to greater marketing expenses, the domestic PV business’ Ebitda margin, according to the statement, came in 50 bps below forecasts.

FCF generation from the auto industry was significant, coming in at Rs 11,300 crore in 4QFY23 (vs. Rs 7,800 crore in FY2023). A sustained demand trend in the domestic market, balance sheet deleveraging, and a modest rebound in JLR volumes, driven by improved chip availability, bode well for the company, it said while recommending a fair value objective of Rs 530 for the stock.

The stock increased 2.32 percent on Monday, reaching a high of Rs 527.60 on the BSE.

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