Tata Motors share price is trading at an all time high – It has crossed 896 today
In a significant development in the Indian automotive industry, Tata Motors has reclaimed its position as the country’s most valued automaker, leaving behind Maruti Suzuki after a seven-year gap. Tata Motors achieved a market capitalization of Rs 3.27 trillion on the Bombay Stock Exchange (BSE) today, surpassing Maruti Suzuki’s Rs 3.16 trillion.
Market Momentum and Factors Driving Tata Motors’ Rise
The surge in Tata Motors’ stock by 10% over the last month has been attributed to the impressive sales and margin performance of its UK-based luxury vehicles subsidiary, Jaguar Land Rover (JLR). The company has also successfully met its free cash flow targets, contributing to the optimistic investor sentiment.
Tata Motors previously held the top spot in 2017 when its market value reached Rs 1.76 trillion, outpacing Maruti Suzuki’s Rs 1.75 trillion. However, it later lost its lead and continued to trail Maruti until the recent surge. Bajaj Auto (Rs 2.14 trillion), Mahindra & Mahindra (Rs 2.01 trillion), and Eicher Motors (Rs 1.01 trillion) complete the list of the country’s top five most valued automakers.
Market Reaction and Stock Performance
Maruti Suzuki stock price currently is at Rs 10,050 while that of Tata Motors has crossed Rs 896. JP Morgan, a leading brokerage firm, re-rated Tata Motors stock on January 8, setting a price target of Rs 925. The report highlighted expectations of robust margin and free cash flow delivery at JLR, resilient market share and margins in India’s passenger vehicles segment, and balance sheet deleveraging as key drivers for the positive outlook.
Jaguar Land Rover’s Role and Performance
Jaguar Land Rover reported a substantial 27% YoY growth in Q4FY24 wholesales, reaching 101,043 units. The retail pick-up also increased by 29% YoY, with deliveries in key markets such as the UK, China, Europe, and North America showing significant growth. Analysts predict that higher sales and a favourable product mix, particularly from JLR, will contribute to better operating margins in Tata Motors’ upcoming third-quarter earnings, scheduled for announcement on February 2.
Financial Outlook and Future Plans
Tata Motors’ CFO, PB Balaji, expressed confidence in Jaguar Land Rover achieving a free cash flow of 2 billion GBP for the ongoing fiscal year, with 750 million GBP already achieved in the first half of FY24. The company has strategically reduced debt through stake sales, including Tata Technologies via its initial public offering (IPO).
Looking forward, Tata Motors aims to expand its electric vehicle (EV) sales by 40% in 2024, building on the success of the previous year when it sold 69,000 EVs. The launch of new EV models, including the Punch EV, and plans for ‘gen-two’ and ‘gen-three’ electric platforms underline the company’s commitment to sustainable and innovative automotive solutions.
