On Monday, Tata Motors experienced a decline of 8.34 percent, falling below the Rs 1,000 mark to conclude at Rs 959.8 per share on the BSE. This drop followed the release of its Q4 results, which fell short of the expectations of market analysts, prompting brokerage firms to maintain a ‘Reduce’ stance. Despite witnessing a notable increase in net profit during the January-March 2024 period, Tata Motors failed to meet Street estimates in terms of revenue and EBITDA.
Throughout the trading session on May 13, Tata Motors’ shares faced consistent selling pressure. In contrast, the BSE benchmark Sensex fluctuated by over 980 points, eventually entering positive territory.
Tata Motors commenced trading at Rs 1,010.30 on the BSE, a decrease from the previous closing price of Rs 1,046.85. Subsequently, the share price continued to decline, reaching a daily low of Rs 948. However, it marginally recovered during Monday’s session, ultimately closing at Rs 959.8 per share on the BSE, marking a decline of Rs 87.05 or 8.32 percent.
Similarly, on the NSE, Tata Motors experienced a decline of Rs 87.25 or 8.34 percent, concluding at Rs 959.40.
The total consolidated revenue from operations for Tata Motors during January-March 2024 amounted to Rs 1,19,986.31 crore, compared to Rs 1,05,932.35 crore in the corresponding period of the previous year.
In response to the Q4 results, Emkay Global brokerage retained its ‘Reduce’ rating for Tata Motors stock, maintaining an unchanged target price of Rs 950 per share. Emkay Global highlighted the subdued Q4 earnings of Tata Motors, noting limited margin expansion despite increased volumes. Additionally, it expressed concerns regarding declining order books, normalization of product mix, stagnant growth prospects in the domestic commercial vehicle sector, and a moderating outlook for the Indian passenger vehicle market.
Another brokerage firm, Novuma, also reiterated its ‘Reduce’ stance, attributing Tata Motors’ muted performance in the Indian commercial vehicle segment to a loss of market share to railways (DFC), a slowdown in infrastructure spending, and a high base effect. Novuma projected a modest revenue/EBITDA compound annual growth rate (CAGR) of 8 percent/13 percent over FY24–26E, compared to the higher rates observed in the previous period. Despite recent rallies in Tata Motors’ stock price, Novuma maintained a cautious outlook, setting a target price of Rs 940 (unchanged).
