Tata Motors Ltd shares advanced nearly 2.5 per cent in the early trade on Thursday after the auto major on Wednesday reported a 1 per cent growth in sales at 40,071 units in May compared with 39,496 in the same month last year.
At 10.07 am, shares of Tata Motors were trading 1.67 per cent up at Rs 456.70 on BSE. The scrip opened at Rs 445 and has touched a high and low of Rs 460.30 and Rs 443.95, respectively, in trade so far. Later, the scrip closed 0.89 per cent up at Rs 453.20.
On NSE, the scrip was trading 1.64 per cent up at Rs 456.55. Shares of Tata Motors opened at Rs 444.10 and has touched a high and low of Rs 460.50 and Rs 444.10, respectively, in trade so far. Nifty was down 17.10 points, or 0.21 per cent, at 8,162.85.
Domestic sales of Tata Motors’ commercial and passenger vehicles rose 2 per cent at 35,643 units during the month as against the same period of previous year.
The company on May 30 posted three-fold rise in its consolidated net profit at Rs 5,177.06 crore for the fourth quarter ended March 31, driven by strong performance of its British arm JLR and robust volume growth of its heavy and medium commercial vehicles.
Post Q4 results, Prabhudas Lilladher in a research report said, “After the disappointment in Q2FY16, JLR and Tata Motors’ marked a healthy improvement in their Q4FY16 performance. Adjusted for one‐offs, insurance claim and forex, the results were better than expected. We believe that the outlook for JLR in China has improved from Q3 onwards, while other geographies like North America and UK are also reporting healthier growth in retails.” The brokerage has ‘Buy’ rating on Tata Motors with target price of Rs 503.
Karvy Stock Broking is also bullish on Tata Motors shares with target price of Rs 550. Karvy in a research report said, “Tata Motors’ (TTMT) Q4FY16 performance was way above our as well as street’s estimates. Operating margin expansion at JLR was on account of better product mix and favorable cross currency movement.”
In the past seven months, shares of Tata Motors have already gained 16 per cent to Rs 449.20 till June 1, whereas the BSE Auto index jumped 5.8 per cent during the same period.