Tata Motors Achieves 52-Week High Following Remarkable 137% Surge in Q3 Profits

Tata Motors, India's leading car manufacturer, experienced a surge in its stock, reaching a 52-week high with a substantial 7.2% increase. This significant boost comes on the heels of Tata Motors reporting a more than twofold increase in its third-quarter profits, primarily driven by robust sales in its luxury car unit, Jaguar Land Rover (JLR).

During the third quarter, Tata Motors' shares gained nearly 24%, surpassing the 15.04% rise in the Nifty Auto Index. Currently up by 6.5%, the stock leads the Nifty Auto index and stands among the top gainers on the Nifty 50 Index, with increases of 1.88% and 0.39%, respectively.

JLR, contributing two-thirds of Tata Motors' revenue, witnessed a substantial 22% increase in revenue during the reported quarter. Despite concerns about global demand, analysts at Elara Capital are optimistic about Tata Motors' strong margins for the current year, attributing it to JLR's robust order book. The brokerage upgraded the stock to "accumulate" from "buy."

Jefferies analysts highlighted that JLR is poised to benefit from the recent ramp-up and capacity expansion of Range Rover and Range Rover Sport models, along with easing chip acquisition costs.

Tata Motors is expected to maintain healthy margins, driven by steady demand for JLR and gaining market share in both private and commercial vehicle segments, according to Kotak Institutional Equities. The commercial vehicle segment, in particular, continues to witness margin expansion due to lower discounts.

Prabhudas Lilladher analysts anticipate further margin expansion in the commercial vehicle segment for the March quarter. Tata Motors' consolidated net profit soared to INR 70.25 billion ($846 million) in the quarter ending Dec. 31, up from INR 29.58 billion a year earlier.

Thirty-one analysts covering the stock maintain an average "buy" rating. Currently trading at a more than 2% premium to the median PT of INR 920, Tata Motors' stock hit a record high of INR 941.9, according to LSEG data. The robust performance in the third quarter positions Tata Motors as a frontrunner in the automotive sector, outpacing the broader market index.