Tata Motors trades higher for 6th straight day, hits over 3-year high

Shares of Tata Motors hit an over three-year high of Rs 358.25, up 1.5 per cent, on the BSE in intra-day trade on Wednesday on the back of heavy volumes. The stock of the Tata Group commercial vehicles company was trading higher for the sixth straight day, having rallied 13 per cent during the same period. It surpassed its previous high of Rs 357 touched on March 3, 2021, and was trading at its highest level since April 2018.

Tata Motors on Tuesday informed stock exchanges that a new wholly-owned subsidiary named ‘TML CV Mobility Solutions Limited’ has been incorporated by the company.

TML CV Mobility Solutions was incorporated to provide end to end services of operating, repair and maintenance including annual maintenance contracts (AMC) and Fleet Management Services (FMS) for the automotive including electric mobility/electric vehicles, electric buses, fuel cell buses, all types of commercial vehicles etc, the company said.

Tata Motors is India's largest commercial vehicle company and fourth-largest passenger vehicle (PV) player. In PV, the company has products in the compact and mid-size cars and utility vehicle segments. Through subsidiaries and associates, the company has operations in the UK, South Korea, Thailand and Spain. The key among them is Jaguar Land Rover, the business comprising two iconic British brands – Jaguar and Land Rover (JLR). TTMT markets cars, buses and trucks in several countries across Europe, Africa, the Middle East, south-east Asia and South America.

Most of the brokerage houses have a ‘buy’ rating on Tata Motors as they see the triple benefit of macro recovery, company-specific volume/margin drivers, and sharp improvement in free cash flow (FCF) and leverage in both JLR as well as the India business.

“We expect demand across some of Tata Motors’ key markets to normalise as we believe the worst is behind. Besides that, tight control on costs should also bolster profitability. We remain positive on JLR’s upcoming product pipeline, which will improve the mix in favour of the more profitable LR brand,” an analyst at Edelweiss Broking said in a stock update.

Last month, the rating agency Moodys had upgraded the outlook on Tata Motors from 'negative' to 'stable' due to continued recovery in the firm's consolidated revenue and profitability. JLR's restructuring efforts and its solid growth in China, as well as the recovery in other key markets such as Europe and North America over the coming quarters, will improve its profits and leverage, believes Moody’s.

At 10:11 am, the stock of Tata Motors trading flat at Rs 353 on the BSE, as compared to a 0.22 per cent rise in the S&P BSE Sensex. Around 16.3 million shares had changed hands in the first hour of trading on the NSE and BSE.