Tata Motors advances 3% as domestic sales increase 27% YoY in October

Shares of Tata Motors gained over 3 per cent to Rs 137.35 apiece on the BSE on Tuesday, a day after the auto major reported 27 per cent growth in its total domestic sales to 49,669 units in October.

The company had sold 39,152 vehicles in October 2019. Passenger vehicle sales during the previous month surged 79 per cent to 23,617 cars as compared to 13,169 units in October 2019.

Total commercial vehicle (CV) sales grew 2 per cent to 28,472 vehicles in October as against 28,002 vehicles in the year-ago period, the company said. Commercial vehicle exports, too, grew 20 per cent during October to 2,420 units against 2,019 a year ago, according to the statement.

For the quarter ended September 30, Tata Motors reported a consolidated net loss of Rs 307.3 crore as compared with a net loss of Rs 187.70 crore a year ago. However, this was much lower than the loss of Rs 1,970.3 crore forecast by a Bloomberg poll of five brokerages. The total revenue from operations during the period crimped. It was 18.19 per cent to Rs 53,530 crore, from Rs 65,431.95 crore a year ago.

JLR’s retail sales during the three-month period rose 53.3 per cent QoQ to 113,569 units, but sales in most markets continued to be impacted by Covid-19. They were down 11.9 per cent year-on-year (YoY). But China showed an encouraging sales trend - up 14.6 per cent in the prior quarter and 3.7 per cent YoY.

"For Tata Motors (TML) we build a 6% sales CAGR in FY20-23E, with FY23E profit of Rs 6,620 crore. Our estimates factor in flattish JLR and nearly 9% India volume CAGR over that time. TML’s stated deleveraging intent (near zero automotive debt over the next few years) is a hugely positive development. Improvement in JLR volumes ex-China and further progress on cost and cash controls are key monitorables," analysts at ICICI Securities said in a result review report issued on October 28.

The brokerage has maintained a "BUY" rating on the stock with the target price of Rs 165.

At 10:05 AM, the stock was trading over 2 per cent higher at Rs 135.65 on the BSE as compared to a 0.71 per cent rise in the benchmark S&P BSE Sensex.

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