Tata Motors has experienced an impressive rally over the last 11 months, with its stock value surging 137% from a 52-week low of ₹400.4 to a record high of ₹950 after announcing a significant profit increase in the third quarter. As the leading performer in the Nifty 50 index over the past year, the company’s shares soared by 8% in early trade, reflecting strong quarterly earnings and the continued success of its Jaguar Land Rover (JLR) unit.
The company opened higher for the second consecutive session, with shares up 6.3% against the previous close, achieving an 8.1% gain to reach ₹950 and pushing the market capitalization to ₹3.13 lakh crore. The surge in Tata Motors’ stock comes on the back of a 137.5% growth in consolidated net profit at ₹7,025.11 crore for the quarter ended December 31, 2023, significantly exceeding market expectations.
Revenue also saw a 25% increase to ₹1.11 lakh crore, supported by a robust performance from JLR and an improvement in both India’s business and easing raw material costs. Operating margins improved, and the EBITDA for the October-December quarter rose by 42.5%. JLR itself reported a revenue increase, contributing to Tata Motors’ best quarterly profit in seven years and its highest-ever revenue for the first nine months of a financial year.
The company’s commercial vehicle segment reported slight growth in domestic wholesale volumes, with expectations of increased demand in the following quarter driven by government infrastructure development and a promising economic growth outlook.
In summary, Tata Motors’ stock has risen sharply, outpacing the Nifty Auto Index and reflecting investor confidence in its recovery and growth prospects, particularly through its JLR unit and robust domestic sales, marking a significant turnaround from pandemic-induced lows.