Tata Motors (NS:) reported a significant rise in its consolidated net profit to reach INR 17,407.18 crore, up a staggering 222% year-on-year. This impressive performance was driven by improved operating leverage, favorable commodity prices and sustained sales growth across all segments. Additionally, the company’s operating revenue for the quarter rose 13% to INR 1,19,986.31 crore, beating analysts’ expectations.
For the full financial year 2023/24, Tata Motors’ net profit rose to INR 37,764.33 crore, significantly higher than the previous financial year. P.B. Balaji, group chief financial officer, expressed satisfaction with the FY24 results, citing the company’s highest-ever revenue, profit and free cash flow. He also mentioned that Tata Motors’ Indian business is currently debt-free and plans to achieve net auto debt status on a consolidated basis in FY25.
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Despite the strong performance, Tata Motors remains cautious about domestic demand in the first half of fiscal 2024-25. The company expects a relative decline in demand in the first half of the year, although it expects resilience in the premium segment. However, Tata Motors is confident of delivering strong results in FY25.
The Board of Directors of the company has recommended a final dividend of INR 6.00 per equity share and INR 6.20 per ordinary ‘A’ share for the financial year ended March 31, 2024. As for Tata Motors’ sales, they showed growth compared to last year. Total wholesale and domestic shipments in April 2024
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Tata Motors’ UK subsidiary Jaguar Land Rover (JLR) continued its strong financial performance trend in FY24 with record fourth quarter results. JLR’s revenue for the quarter rose 11% year-on-year to UK£7.9bn. Moreover, JLR’s FY24 revenue grew significantly by 27% year-on-year.
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So should you go long on Tata Motors earnings after the fourth quarter? Well, InvestingPro’s financial health check tells us clearly that this is an investment grade stock with a rating of 4 out of 5. More than 100 parameters were analyzed to arrive at this near-perfect score.
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However, we also need to look at estimates before making an investment decision. This is where the fair value function comes into play. According to the 14 models used to calculate the intrinsic value of Tata Motors shares, the fair value is INR 1,215, indicating an upside potential of 22.4% compared to a CMP of INR 989.7.
Looking ahead, Tata Motors expects JLR’s earnings before interest and tax (EBIT) in FY2025 to be the same as the previous financial year. The company remains optimistic about passenger vehicle demand, aiming to maintain double-digit EBITDA margins and positive free cash flows for its PV business.
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X (formerly Twitter) – Aayush Khanna