Tata Motors on Monday declined 7.68 per cent to below Rs 1,000 at Rs 966.40 apiece on the BSE in the early trade, as its Q4 results missed Street estimates and brokerage retained ‘Reduce’ position. Its net profit during January-March 2024 soared over threefold in Q4, with its share price rising on Friday. However, it missed Street estimates on revenue and Ebitda fronts.
Tata Motors’ total consolidated revenue from operations during January-March 2024 stood at Rs 1,19,986.31 crore, compared with Rs 1,05,932.35 crore in the year-ago period.
Following the Q4 results, brokerage Emkay Global retained its ‘Reduce’ rating on the Tata Motors stock, with an unchanged target price of Rs 950 per share.
It said Tata Motors’ Q4 earnings were muted, with limited margin expansion across businesses, despite higher volumes. While deleveraging progress continued, it believes the best may be behind for all businesses amid declining orderbook, normalising mix, flattish growth outlook for domestic CV space; and moderating India PV outlook.
Another brokerage Novuma also retained its ‘Reduce’ view. It said, “A muted showing in India CV is likely due to loss of share to railways (DFC), slowdown in infra spend and high base. We are building in a moderate revenue/EBITDA CAGR of 8 per cent/13 per cent over FY24–26E versus 21 per cent/25 per cent over FY21–24. Tata Motors has rallied 15 per cent/ 60 per cent in past three/six months, and 1-year forward EV/EBITDA is 6 times against 5-year mean of 5 times. Retain ‘REDUCE’ with target at Rs 940 (unchanged).”
It added that Tata Motors’ revenue and Ebitda missed estimates slightly due to lower-than-expected numbers in India CV and PV divisions. JLR order book fell from 1,48,000 units in December to 1,33,000 units in March, it said.
The order book exhaustion and a high base should lead to single-digit growth in FY25E, it suggested.
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