Business

IIE DIGITAL DESK: As Tata Motors gears up to release its Q1 results today, all eyes are on its share price performance. Analysts predict a mixed bag of outcomes for the auto giant, which has faced several industry-wide challenges in recent months.

The company is expected to report significant revenue growth, driven by strong sales of its commercial and passenger vehicles. The domestic market has shown robust demand recovery post-pandemic, and Tata Motors’ innovative electric vehicle lineup has garnered considerable consumer interest.

However, the ongoing global semiconductor shortage and rising raw material costs are likely to impact profitability. Analysts caution that these factors may weigh heavily on the company’s margins, despite the anticipated top-line growth. The performance of Jaguar Land Rover (JLR), Tata Motors' luxury vehicle segment, will also be closely monitored. JLR has been grappling with supply chain disruptions and market uncertainties in key regions, which could influence overall results.

Market participants will be keenly watching the management’s commentary on future guidance and strategies to navigate the current economic landscape. The stock’s reaction to the Q1 earnings will set the tone for its near-term trajectory, making today’s results crucial for investors and stakeholders alike.

Tata Motors June quarter results impressed analysts who said the JLR-owner's operating performance was strong and the Tata group firm's deleveraging plan is on track. A strong beat was led by JLR and commercial vehicle business, even as the passenger vehicle segment disappointed. Post Tata Motors' quarterly results, a few analysts even believe JLR’s volume improvement along with better mix will likely continue and may result in guidance upgrade in coming quarters. Analysts are keeping a 'Buy' rating on the stock, with their target prices of Rs 700-800 per share suggests up to 20 per cent potential upside ahead.

On Tuesday, the stock rose 4.04 per cent to hit a high of Rs 665.30 on BSE.

Tata Motors should witness a healthy recovery as supply-side issues ease for JLR, along with a better mix, lower discounts and operating leverage, said Motilal Securities. It has suggested a target of Rs 750 on the counter.

Nuvama Institutional Equities has upped its target on the stock to Rs Rs 785 from Rs 720, factoring in increase in estimates and reduction in share capital by 4 per cent owing to conversion of DVR shares into ordinary shares.

Jefferies has maintained a 'Buy' on the stock with a target price of Rs 800 per share. CLSA sees the stock at Rs 780 while Morgan Stanley pegs it at Rs 711 per share.