look news india
Tata Motors Share Price: Tata Motors shares fell nearly 10 percent in early trade on Monday, May 13. The company's March quarter results failed to please the stock market. Brokerage firms have given mixed views on the company's results and are skeptical about its growth pace ahead of demand. Tata Motors' net profit has increased more than 3 times in the March quarter. The company said that its net profit in the March quarter increased by 222 per cent year-on-year to Rs 17,407 crore.
Good operating margins, favorable commodity prices and strong volume growth across segments helped the company expand its profits. Meanwhile, its revenue increased by 13 percent year-on-year to Rs 1.2 lakh crore. After the results, brokerage firms gave mixed views on Tata Motors shares.
JP Morgan gave overweight rating
Brokerage firm JP Morgan is bullish on the stock with 'overweight' rating and target price of Rs 1,115. This has indicated an increase of about 13 percent in its shares from the current level. The brokerage said the company's March quarter results were in line with estimates, but its free cash flow (FCF) exceeded both our estimates and the company's target. Jaguar Land Rover in particular has free cash flow of £89.2 million in the March quarter.
Jefferies is also excited about Tata Motors
Jefferies also recommends buy on the stock with a target price of Rs 1,250. The brokerage said the company's net automotive loans have declined 45 per cent quarter-on-quarter and are at a six-year low. Jefferies said the company is set to launch some new products in the second half of fiscal 2025, which could accelerate its growth.
Nomura and Morgan Stanley downgraded ratings
However, on the other hand, Nomura downgraded Tata Motors to 'neutral' from 'buy' and said JLR may face demand slowdown. “Passenger vehicle segment growth may outperform the industry and commercial vehicle growth is expected to remain slow,” the brokerage said.
The company expects demand to remain sluggish in the first quarter
Morgan Stanley also downgraded the stock from overweight to equal weight. The company itself has predicted a slow start to FY2025. Shailesh Chandra, managing director, passenger vehicle vertical, Tata Motors, said, “We expect the industry to remain moderate and grow at less than 5 per cent. The pent-up demand has now been released and channel inventory is high. “Furthermore, in the first quarter, demand for the Lok Sabha elections is expected to remain low despite some temporary factors.”
Around 02 pm, Tata Motors shares were trading at Rs 959.60 on NSE, down 8.33 per cent.