Analysts expect the severe second wave of Covid-19 infections to impact Tata Motors Ltd.’s standalone performance and semiconductor shortages to drag its luxury brand’s volumes in the near term. Still, most brokerages maintained their bullish stance on the automaker.
Tata Motors suffered a loss of Rs 7,585 crore in the January-March period against the Rs 2,941-crore profit in the quarter ended December. That was because of exceptional charges even as sales of its utility vehicles and cars rose during the period.
Sales of Jaguar Land Rover, which contributes 80% to Tata Motors’ revenue, however, fell 3.88% sequentially in the quarter ended March.
“JLR and domestic Q4FY21 margin performances were slightly better than expected, while FY22 guidance was in line,” HSBC said in a note. But UBS and Kotak Institutional Equities said JLR’s operating performance was below expectations.
Of the 34 analysts tracking the automaker, 20 have a ‘buy’ rating, six suggest a ‘hold’ and eight recommend a ‘sell,’ according to the Bloomberg data. The average of the 12-month consensus price targets implies an upside of 11%.
Tata Motors’ stock dropped 6.1%, the most in a month, but pared some of the losses to trade 4.8% lower around 11:30 a.m. on Wednesday.
Here’s what brokerages have to say about Tata Motors’ fourth-quarter results…
- Maintains ‘neutral’ with a price target of Rs 360 apiece.
- Semiconductor shortage likely to impact JLR volumes in the first half of 2021, but management hopes to make it up in the second half.
- In the domestic business, passenger vehicle volume growth will remain largely un-impacted because of the backlog.
- Truck retails to be significantly impacted in Q1FY22 due to lockdowns
- JLR Ebitda strong but still 9% below expectations.