Tata Motors Hits Fresh 52-Week High Ahead of Q4 Results; Key Things Investors Should Know

Last Updated: May 10, 2023, 14:29 IST

Tata Nexon EV Max Dark XZ+ LUX with a 7.2 kW AC fast charger has been priced at Rs 19.54 lakh (Photo: Tata Motors)

Analysts are anticipating a strong performance with significant revenue growth and profitability; Should you invest?

Tata Motors share price touched a new 52-week high on Wednesday. Shares of the Rekha Jhunjhunwala-backed company opened at Rs 508 apiece, up 0.9 per cent higher than the previous of Rs 503.65 apiece on NSE. Shares of the company touched an intraday high of Rs 512.90 and low of Rs 505.20.

Tata Group passenger cars & utility vehicles company is scheduled to announce Q4 results on Friday, May 12.

Thus far in the calendar year 2023 (CY23), Tata Motors have outperformed the market by surging 32 per cent, as compared to 1 per cent rise in the S&P BSE Sensex.

What to Expect Ahead of Q4 Results?

Analysts are anticipating a strong performance with significant revenue growth and profitability.

“The company has reported better-than-expected sales volume growth in its Jaguar Land Rover (JLR), commercial vehicle (CV), and passenger vehicle (PV) segments and thanks to price hikes implemented in Q3FY23, the company is anticipated to report strong revenue growth in Q4FY23.

We are expecting a strong recovery in the company’s consolidated financials as supply-side issues are relaxing (for JLR) and commodity headwinds are easing (for PV and CV). It could improve the margin profile of the company and enhance its FCF generation in the coming years. We have an FY26 price target of ₹715 per share, which represents an upside potential of 41% from the current market price (CMP),” said Vinit Bolinjkar, Head of Research, Ventura Securities.

Abhishek Gaoshinde, Deputy Vice President Research at Sharekhan by BNP Paribas said, “Tata Motors is witnessing an improvement in all business verticals – JLR, CVs, and PVs. The company is witnessing robust demand in JLR and is expected to deliver better operational efficiencies, aided by aggressive launches and market positioning. We expect sequential improvement in operating performance in JLR as well as standalone business in Q4FY23E. While JLR’s free cash flow is expected to improve sharply in Q4FY23E, the domestic PV and CV business continue to maintain traction in volumes. Along with an improvement in operating performance a value unlocking in Tata Technologies would help Tata Motors in reducing net automotive debt in medium term. Currently we have Buy rating on the stock with target price of Rs 516.”

Tata Motors Weighs Dividend

Further, the company will also be declaring dividend to shareholders for the fiscal year that ended on March 31, 2023. If a dividend is declared, it would be the automobile giant’s first dividend announcement since FY16. In 2016, the business had declared a dividend of Re 0.20 per equity share.

“As part of May 12 board meeting, Tata Motors said it will also consider declaring a dividend. If the company approves and announces a dividend then it will be the first dividend since FY’16. We think that if an FY23 dividend is announced it is likely to be small,” said global brokerage Morgan Stanley in its report.

Disclaimer:Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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