Tata Motors' shares increased to near 3 percent on Monday after the company reported an improvement in Jaguar Land Rover sales for July and August.
Jaguar Land Rover retail sales were 36,421 in July and 28,887 vehicles in August, seasonally lower. Although they were down 4.0% and 15.5% from a year earlier, both months represent a greater recovery since the first quarter of fiscal 21, when sales fell 42.4% from June 24. 9%, the company said in a regulatory statement.
However, UK retail sales in July and August increased significantly on an annual basis, 29.1%, and 14.3%, respectively. The larger recovery in July and August from year-on-year declines in the first quarter of fiscal 21 and/or June can also be seen in other regions.
How do Tata Motors' shares gain over 3 percent?
Recent comments from management indicated that inventory of the new best-selling models is low in markets outside the UK, as production only started to grow in June.
CLSA estimates second quarter wholesale sales of 21 at 97,000 units (-28% year-on-year), which would represent a 48% quarter-on-quarter growth compared to the previous quarter 21, wholesale sales of 65,400 units (-45% year-on-year).
The brokerage expects JLR / India Commercial Vehicle (CV) / India Passenger Vehicle (PV) volume to see a CAGR of 2% / 9% / 16% for FY20-23CL. JLR's EBIT margin is expected to improve from 0% in fiscal 20 to 5% in fiscal 23, while its EBITDA margin in India is expected to recover from 1% to 6%.
The brokerage firm maintains the buy rating with a price target of Rs 220 per share.
The share price rose as much as 3.95 percent to the intraday high of Rs 150.00 on the BSE. At 12:25 p.m. M., The shares were trading 3.33% higher at Rs 149.10 each.
Tata Motors' luxury vehicle division, JLR, reported 15.5%.
Mumbai: Tata Motors could cut more than Rs 50 billion from previously estimated three-year Capex for Jaguar Land Rover's unit and operations in India, in an effort to meet its ambitious goal of writing off-budget debt.
Last year, the company had made an investment of 4 billion pounds (37,600 crores at today's exchange rate) in each of the next three years in the British luxury vehicle unit JLR. On average, Tata Motors spends around Rs 4.5 billion annually on independent businesses in India. These have now been reduced to £ 2.5 billion in JLR crore and Rs 1,500 for the current fiscal year.
Recent indications from the company to investors and analyst comments suggest that it will continue with similar investments for at least Fiscal Year 22 and Fiscal Year 23. This would result in a reduction of more than Rs 42,000 crore to JLR and 9,000 crore rupees in India for three years.
Lower CAPEX will be driven by avoiding investing in nonessential areas (such as testing, which could be outsourced), forming more partnerships (such as with BMW), and prioritizing investments for new platforms and electric vehicles. Based on these measurements, JLR said after Tata Motors announced first-quarter results that it expected to generate positive free cash flow beginning in the current second quarter.
Tata Motor's three-pronged approach to achieving near-zero net debt by fiscal 24 is based on generating free cash flows, monetizing non-core assets, and, if necessary, raising funds through equity instruments, the company said. Company to investors last week.
Generating free cash flows at the company level is the key part of the plan. It focuses on improving revenues, reducing costs, and establishing investment control plans for four key companies, including its auto financing business.
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