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This article is more than 10 month old.

Here's why Tata Motors rallied 26% in just 2 sessions

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Shares of Tata Motors rallied 26 percent in just 2 sessions on the back of strong JLR sales.

Here's why Tata Motors rallied 26% in just 2 sessions
Shares of Tata Motors rallied 26 percent in just 2 sessions on the back of strong Jaguar Land Rover sales. The sentiment also remained positive after global brokerage house CLSA maintained a bullish stance on the stock.
Just today, the stock rose as much as 13.3 percent to the day's high of Rs 249.5 per share on the BSE. The stock has gained 23.27 percent in one year and risen 32 in 2021.
JLR Q3 retail sales came at 1,28,000 units (down 9 percent YoY) was broadly in line with a monthly tracker, noted CLSA. The Jaguar brand declined 21 percent YoY in Q3 while Land Rover performed better, down just 5 percent YoY, it added.
The volume share of electric vehicles (EV) also increased to 12 percent in 3Q, from 6 percent in Q2 lifting the sentiment.
"We continue to forecast a sequential volume recovery for JLR coupled with mix improvement and cost rationalisation, which should drive strong FCF generation and deleveraging for Tata Motors. We maintain our BUY recommendation on an unchanged target price of Rs270, and it remains our top pick," the brokerage informed.
Tata Motors-owned Jaguar Land Rover (JLR) on January 11 released auto numbers which showed some signs of recovery on the back of strong China sales. In 2020, JLR retail sales stood at 4,25,974 vehicles, down 23.6 percent from 2019reflecting the industry impact of COVID-19 particularly in the first half of the year when plants were shut down for more than two months. China sales, on the other hand, rallied, up 20.2 percent QoQ and 19.1 percent YoY.
The brokerage forecasts JLR’s EBIT margin to improve from 0 percent in FY20 to 5.7 percent in FY23, while the India EBITDA margin to recover from 1 percent to 7.2 percent. It also added that the auto net debt should decline from Rs 48,700 crore in FY20 to Rs 33,300 crore by FY23.
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