Tata Motors extends rally on encouraging Q2 results, jumps 34% in 2 days

Shares of Tata Motors jumped as much as 15 per cent in the morning deals on Tuesday on better-than-expected Q2 results. The auto major had settled over 16 per cent higher during the one-hour Muhurat Trading session on Sunday, that marked the beginning of new Samvat year - 2076. In two trading sessions, the stock has jumped 34 per cent.

On Friday, Tata Motors reported a better-than-expected earnings for the September quarter, with improvement in the operational performance at Jaguar Land Rover, its Britain-based luxury vehicle arm. Net loss at the consolidated entity narrowed to Rs 216.6 crore in the three months to September, from Rs 1,048.8 crore in the same period a year before.

Net revenue dropped nine per cent in the period to Rs 65,432 crore. Driven by an improvement in JLR’s operational metrics, earnings before interest, tax, depreciation and amortisation (Ebitda) in the quarter rose 250 basis points (bps) to 12.4 per cent, the highest in 16 quarters.

Loss at the India business, however, deepened with poor commercial vehicle (CV) and passenger vehicle (PV) sales.

Net revenue at JLR increased eight per cent year-on-year to £6,086 million, while Ebitda went up sharply by 480 bps to 13.8 per cent.

The latter improvement was led by an increase in China sales, better sales mix, favourable foreign exchange and cost saving measures, said P B Balaji, chief financial officer at Tata Motors.

“It was a quarter of well-rounded performance at JLR. We are confident of delivering the plans,” Balaji said, adding that ahead of the £2.5 billion by 2020 targeted under the cost saving programme called Project Charge, £2.2 billion had been delivered to date. Savings under the project is being targeted under three heads — investment, working capital, and costs and profit.

At 10:27 am, the stock was trading nearly 12 per cent higher at Rs 165.50 apiece on the BSE. The S&P BSE Sensex, on the other hand, was trading 268 points or 0.68 per cent higher at 39,518 levels.

Tata Motors