Tata Motors Management Gets Cautious, Says JLR Margins to Remain Flat, Stock Down 8%

Stocks of the Tata Group company, Tata Motors Ltd, have fallen by 8% in today’s morning session on flat margin guidance for JLR by the management in the Q4 FY 2023-24 earnings presentation.

Tata Motors Q4 highlights

Tata Motors in its Q4 FY 2023-24 has reported a revenue of Rs.1.19 Lakh crores against a revenue of Rs.1.05 Lakh crores in Q3 FY 2023-24, a surge of 14.3% on a YoY basis, The net profit has surged to Rs.17,407 crores in this quarter from Rs.5,400 crores in Q3 FY 2023-24. The net profit in this quarter also includes a tax credit balance of around Rs.8,160 crores.

EBITDA for this quarter stands at Rs.17,035 crores which is up by 33% from Rs.12,810 crores in Q3 FY 2023-24, While the EBITDA Margins increased by 210  bps to  14.2% in this quarter as compared to 12.1% in Q3 FY 2023-24.

Why has the stock fallen by 8%

The markets have turned the tables down for the stock after the management’s cautious commentary for FY25. During its earnings call, Tata Motors management provided insights on Jaguar Land Rover’s (JLR) financial outlook, anticipating that margins are expected to remain stagnant in the fiscal year 2025. This forecast is attributed to increased spending on marketing initiatives. Additionally, they see a decline in performance for the June quarter compared to the preceding March quarter.

Check: Tata Group Stocks

Market Reaction to This Cautious Management Commentary

Markets have reacted negatively to this cautious management commentary, The stock has been the Top Nifty 50 loser today down by 8% from its previous day’s closing price of Friday.

Analysts have also cut down their target prices for the stock after the earnings, The stock currently trades at Rs.970.50 a piece.

Conclusion: The cautious management commentary on flat margins for JLR in FY 25 has been the key reason for the change in market view regarding the stock. The stock has been the top performer in the Nifty 50 index over the last year and has given returns of more than 80% over the last year, The Tata Motors stock currently trades at Rs.970,50 a piece down by 7% from its previous day’s closing price and It has a 52 week high and low of Rs.1065.60 and Rs.504.75.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.