TATA Motors’ share price rises 2.75% on Q1 performance

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Tata Motors’ (TTMT) share price went up by 2.75 per cent after the company declared its first quarter performance on Tuesday.

Tata Motors announced a net profit of ₹3,202 crore for the quarter ending in June. This marks a significant turnaround from the ₹5,006 crore loss reported during the same period last year. However, the company experienced a 40 per cent drop in profits compared to the March quarter, when it reported ₹5,407 crore in profits. The company also revealed plans for ₹8,000 crore in domestic capital expenditure.

According to a report by ICICI Securities, despite a favorable sales mix, it is anticipated that a portion of the margin increase, about 110 basis points, might be reversed in the subsequent quarter.

Looking ahead, with Jaguar’s all-EV portfolio set to be introduced in FY25, the guided 10 per cent EBITM should be approached with caution, considering the EBITM of 8.6 per cent reported for Q1FY24. The quarter associated with registration holidays in the UK/EU, Q2, is likely to witness a flattish quarter-on-quarter outlook for overall retail volumes, impacting Free Cash Flow (FCF) figures.

In the Indian business segment, commercial vehicles (CVs) proved to be a positive surprise, with an EBITDAM decline of just 70 basis points q-o-q to 9.4 per cent. In contrast, passenger vehicle (PV) EBITDAM was impacted, dropping 200 basis points q-o-q to 5.3 per cent due to higher IPL-related expenses and elevated cell sourcing prices. 

Tata Motors’ share price went up by 2.75 per cent to ₹658 at 09:44 a.m. on BSE. At 10.45 a.m, it was at ₹647.