Tata Motors rallies 5% on robust JLR performance

NEW DELHI: Tata Motors Ltd rallied over 5 per cent in morning trade on Thursday, as strong operating performance from JLR offset soft performance at domestic business and other subsidiaries.

On a consolidated basis, India's largest automobile firm by revenues, posted 36.71 per cent decline in consolidated net profit for the fourth quarter that ended in March 2013, pulled down by the ailing domestic operation.

At 11:40 a.m.; Tata Motors pared some of the morning gains and was trading 3.2 per cent higher at Rs 312.80. It hit a low of Rs 315 and a high of Rs 319 in trade today.

JLR margins came in at 16.9 per cent benefiting from better geographic/product mix and favorable currency which aided the bottom line.

Standalone revenues of Jaguar Land Rover for quarter four grew 22 per cent to 5,053 million pound (Rs 42,855 crore).

The JLR subsidiary accounted for almost 90 per cent of Tata Motors' consolidated operating earnings and more than 95 per cent of its consolidated profit after tax in FY13.

The share of China in JLR's total sales volume shot up from 17.3 per cent last year to 21.4 per cent in FY13.

While the 4QFY2013 results are on expected lines, management’s commentary did not indicate any major signs of a revival in domestic business soon.

The domestic business of Tata Motors continues to reel under pressure which may put some bit of pressure on the stock atleast in the near term, say analysts.

“Domestic operations continue to reel under pressure due to macro economic weakness. Stagnant freight rates with rising diesel prices have been a dampener,” Dolat Capital said in a note.

The brokerage firm maintains ‘Accumulate’ rating on the stock with a 12-month target price of Rs 344. They have also upgraded their EPS estimates for FY15 from Rs 35 to Rs 37.