Tata Motors shares jump 7% on robust JLR sales data

Shares of Tata Motors rallied nearly 7% in intraday trade and topped the gainers chart on the BSE, in an otherwise weak broader market. The auto heavyweight witnessed a surge in buying activities after it reported higher global wholesales in the December quarter, including that of Jaguar Land Rover (JLR), on the back of improvement in chip supplies. 

Cheering JLR sales data, Tata Motors share price gained as much as 6.8% to hit an intraday high of ₹415.80 after opening higher at ₹399.30 on the BSE. On Monday, shares of auto major closed 1.95% higher at ₹389.40. In contrast, the BSE benchmark Sensex was trading 532 points lower at 60,214 levels.

Tata Motors shares touched a 52-week high of ₹528.35 on January 18, 2022, while it hit a 52-week low of ₹366.05 on May 12, 2022. The stock, with a market capitalisation of ₹1.38 lakh crore, delivered a negative return of 17.5% in the last one year, while it dropped 5% in six month period. The stock gave flat returns in the past one month, whereas it climbed 6% in a week.

Tata Motors prices got a boost today after the Tata group company released global wholesales data, including JLR, for the third quarter ended December 2022, which rose 13% year-on-year (YoY) to 3,22,556 units.

Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in Q3FY23 were at 97,956 units, lower by 5%, over same period last year. However, passenger vehicles registered a growth of 23% YoY at 2,24,600 units in Q3FY23, Tata Motors said in an exchange filing.

Meanwhile, global wholesales for JLR, the U.K.-based subsidiary of Tata Motors, rose 15% YoY to 79,591 units with a significant increase in New Range Rover and New Range Rover Sport production. On the quarter-on-quarter (QoQ) basis, wholesales rose 5.7% from the September quarter, aided by gradual improvement in chip supplies.

Compared to the prior quarter, wholesale volumes were higher in North America (17%), U.K. (13%), and overseas (10%). On the flip side, wholesale volumes in China declined by 13%, while it slipped 3% in Europe, due to the Covid-19 impact.

The production ramp up of New Range Rover and New Range Rover Sport continued with 27,456 units wholesaled in the quarter, up from 13,537 in Q2.

As per the exchange filing, retail sales for the third quarter were 84,827 units, up 5.9% compared to the same quarter a year ago and 3.7% lower than from the prior quarter ending  September 30, 2022, reflecting timing between retails and wholesales.

Besides, the company continues to see strong demand for its vehicles. As of December 31, 2022, the total order book increased to 215,000 client orders, up around 10,000 orders from September 30, 2022. Demand for the New Range Rover, New Range Rover Sport and Defender remain strong and represent 74% of the order book, as per the company.

JLR is slated to release its results for the third quarter on January 25, 2023. On a preliminary basis, free cash flow is likely to be over £400 million positive in the quarter. In December 2022, the company completed a renewal of its undrawn revolving credit facility with 23 banks at £1.45 billion with the maturity date extended from March 2024 to April 2026.