Tata Motors hits 52-week high on Jaguar Land Rover's July sales data

NEW DELHI: Tata Motors Ltd rallied over 3 per cent in intraday trade to scale above Rs 500 levels in a first. This, after the global auto giant said that sales of luxury brand Jaguar Land Rover rose 12.24 per cent to 39,467 units in July, compared to 35,162 units in the same month last year.

Tata Motors DVR also surged 9.9 per cent at Rs 364.75. They hit a fresh record high of Rs 364.85 earlier in trade today.

Tata Motors is looking to launch 20-25 new platforms in the coming years, Ravi Pisharody, the company's Head-CV & ED told ET Now.

"About 20-25 will be completely new platforms. However, including BS4 variants, CNG variants there will be 100 plus products." Pisharody said.

Asked about the company's capex plans for FY15, Pisharody said, "Our investments in capacity have all been made. We are good for a number of years now. All our investments are in new products and between Rs 1200-1500 crore."

Pisharody feels that it will take a couple of quarters for growth in the company's commercial vehicles segment to pick up momentum. "It will take at least a couple of quarters for growth to pick up momentum, because the fact is that the two-year recession was quite deep," Pisharody said. "For growth come back, we require a few policy announcements from the new government for the sentiment to change rapidly," he added.
Even though JLR sales rose in the month of July, Tata Motors reported a fall in its global sales by 8.46 per cent to 80,151 units in July. The company had sold 87,566 units in the same month last year.

In the passenger vehicles category, the global sales last month were at 49,001 units, as against 46,684 units in July 2013, up 4.96 per cent, Tata Motors said in a statement.

“If you look at the JLR performance, it has been driving the stock for quite some time and in this particular quarter also again, JLR has been doing most of the hard work,” said Pankaj Pandey, HoR, ICICIdirect.com.

“We have a target price of about Rs 560 on the stock. We would like to believe that the domestic CV business would recover in some time, which is where we are still not seeing as of now visible improvement in financial numbers,” he added.

According to analysts, the best is yet to come out from Tata Motors. Their passenger vehicle business has been struggling, but with new launches, they expect some bit of improvement to happen.

Last week, most brokerage firms revised their earning estimates as well as target prices for Tata Motors after the auto giant reported a consolidated net profit of Rs 5,398 crore, up 212 per cent, in the April-June quarter as against Rs 1,726 crore in the year-ago period.

Its revenue on a consolidated basis grew 38 per cent to Rs 64,683 crore, up from Rs 46,796 crore a year ago. The impressive results were on the back robust sales volume growth of Jaguar Land Rover.

Brokerage firm Nomura has a 12-month target price of Rs 600 on the stock, which translates into a return of 23 per cent from Thursday's closing price of Rs 484.60.

Barclays has maintained its 'Overweight' rating on the stock and revised its target price upward to Rs 561. The brokerage expects improvement in JLR to offset concerns on standalone operations.

“We are positive because 1) we believe JLR's EBIT margin is set to expand on account of improved product mix and platform consolidation benefits, and 2) strong volumes are supported by a healthy pipeline of launches,” the report said.