InvestorQ : Why did the stock of Tata Motors rally so sharply on Tuesday 06 October?
Mahima Roy made post

Why did the stock of Tata Motors rally so sharply on Tuesday 06 October?

Answer
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2 weeks ago


Tata Motors was up 7% at Rs.143 on Tuesday on the back of a stupendous performance put up by Jaguar Land Rover. In fact, JLR retail sales in the Sep-20 quarter were up 53% at 113,569 units. This growth comes after several months of tepid sales

There was also celebration on the Tata Motors counter that all plants of JLR have resumed production. This includes the vehicle manufacturing plants at Solihull and Halewood in UK, and Nitra in Slovakia. Some plants have moved to a 2-shift pattern.

While the sales have improved on a sequential basis, the sales numbers are still down about 12% compared to pre-COVID levels. The lucrative China market for JLR cars saw 14.6% sequential quarter basis while MOM sales were higher by 28%.

QOQ sales numbers for other key regions also showed growth with UK up 232%, Europe up 79% and North America up 21%. This also led to positive generation of free cash flows with nearly £in free cash available with the company.

Two brokerage houses; CLSA and Motilal have sharply upgraded TAMO. While CLSA has pegged the target price at Rs.220 on sequential recovery, Motilal has pegged the target price of the stock at Rs.226 on the back of reasonable forward valuations.