Tata Motors share price skyrockets 9% despite net loss in Q4; targets cut but analysts remain bullish Tata Motors’ share price rallied 9.6% on Friday to hit an intraday high of Rs 408 per share as investors reacted to the auto major’s January-March quarter results. Tata Motors reported a consolidated net loss of Rs 1,033 crore in the fourth quarter of the previous fiscal year, down from Rs 7,605 crore in the same period last year. Analysts believe Tata Motors’ results were a mixed bag, and expect near term headwinds for the stock. They have trimmed the target prices, but have maintained their ‘Buy’ calls on Tata Motors stock. Results at a glance Tata Motors reported EBITDA at Rs 8,800 crore. JLR Revenue came in at £4.8 billion down 27.1%, EBITDA at 12.6% Tata commercial vehicle Revenue was Rs 18.500 crore, up 29.3%, EBITDA at 5.9% Tata passenger vehicle revenue Rs 10.500 crore, up 62.0%, EBITDA at 6.9% Tata Motors’ management said that demand remains strong despite geopolitical and inflation concerns. “We expect performance to improve through the year as the China COVID and semiconductor supplies improve and aim to deliver strong EBIT improvement and free cash flows in FY 23 to get to near net auto debt-free by FY 2024,” they added. Strong demand for New Range Rover has helped order book to a new record at more than 1,68,000 units. Analysts trim targets, retain ‘Buy’ calls Analysts at Motilal Oswal said that the results of Tata Motors were a mixed bag with Jaguar Land Rover missing estimates while commercial and passenger vehicle segment beat their estimates. Tata Motors has cut their FY23/FY24 consolidated EPS estimate by 12% each owing to rising covid-19 in China, cost inflation, and rising Indian Rupee. “The stock trades at 13.4x FY24E consolidate P/E and 3.2x EV/EBITDA ratio. We maintain our Buy rating, with a TP of Rs 485 per share,” analysts said. ICICI Securities has cut its target price from Rs 703 per share earlier to now Rs 677 apiece but retain the ‘Buy’ call. “Continued market share gains in the domestic PV business, CV upcycle and delivery on FCF generation (aim is to be auto debt-free by FY24E) coupled with aggression in building the EV portfolio resonate well with investor expectations,” ICICI Securities said. Analysts said that several factors surprised positively such as a reduction in net auto debt, however, these variables may moderate in the near term. Yes Securities believes the ongoing chip shortages compounded by UK-Russia tension and recent China lockdowns could both sales and component supplies for Tata Motors. “Tata Motors continue to remain our top pick, given its improving India franchise, early leadership in EVs in India, and JLR’s aggressive cost controls,” they added,
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.