Tata Motors share price rises 3%, top gainer among Nifty 50 stocks

On a day when benchmark indexes were trading in the Rd, Tata Motors’ share price increased by about 3% in morning trading on Monday, making it one of the top gainers among the Nifty 50 equities. Although Jaguar Land Rover’s margin weakness was the main cause of Tata Motors’ weak Q2 performance, experts predict that the second half of FY25 would see an improvement as JLR’s margin issues subside.

The price of Tata Motors’ stock began Monday at ₹801 on the NSE, somewhat below its closing price of ₹800.95. The price of Tata Motors’ stock fell to ₹792 but then rose to ₹829, representing gains of over 3%.

Soft Q2 results of Tata Motors

The Tata Group firm reported an 11% year-over-year (YoY) drop in consolidated net profit to ₹3,343 crore for the quarter ending in September 2024 (Q2 FY25) as opposed to ₹3,764 crore for the same period the previous year.

While profits before interest, tax, depreciation, and amortization (EBITDA) decreased 16% year over year from ₹13,767 crore to ₹11,567 crore, the EBITDA dropped 230 basis points to 11.4% due to a challenging external environment.

According to experts, Jaguar Lad Rover margin mismanagement was the cause of the margin contraction. In its results presentation, Tata Motors said that short-term supply difficulties had an effect on Q2 performance. The full-year forecast remains intact at around £30 billion in sales, an EBIT margin of at least 8.5%, and positive net cash.

Jefferies According to India Pvt Ltd, Tata Motors’ Q2 Ebita dropped 15% year over year and was 9% lower than Jefferies’ projections because to a poorer JLR margin. Even though JLR is dealing with challenging macro conditions in China and Europe, delayed shipments and limited availability of aluminum also had an effect on 2Q. JLR maintained its FY25 margin estimate and anticipates a substantially improved 2H. The demand for PV and CV in India has also decreased, although CV profitability is still strong. Jefferies