Shares of Tata Motors and Tata Motors DVR (Differential Voting Right) rose up to 6% on the BSE in Tuesday’s intra-day trade in an otherwise poor market after Jaguar Land Rover (JLR) announced increased wholesale sales in Q3FY23, citing steady improvement in chip supplies. JLR is a completely owned subsidiary of Tata Motors, which is part of Tata Sons. The S&P BSE Sensex was down 0.53 percent at 60,426 at 09:44 AM.
According to TataMotors, wholesale volumes were 79,591 units in the period (excluding the Chery Jaguar Land Rover China joint venture), up 5.7 percent from the prior quarter ending September 30, 2022 (Q2FY23) and 15% from the same quarter a year earlier (Q3FY22).
Tata Group’s passenger car and utility vehicle manufacturer stated that demand for its vehicles remains high. The overall order book climbed to 215,000 customer orders in Q3FY23, an increase of roughly 10,000 orders from Q2FY23. Demand for the New Range Rover, New Range Rover Sport, and Defender has remained high, accounting for 74% of the order book.
Meanwhile, Tata Motors predicted that free cash flow will be more than £400 million positive in the third quarter. In December 2022, the company completed a renewal of its undrawn revolving credit facility with 23 banks for £1.45 billion, with the expiry date pushed back from March 2024 to April 2026. JLR intends to release unaudited Q3FY23 earnings on January 25, 2023.
The increase in wholesale shipments comes in the midst of ongoing chip supply difficulties and Covid-led lockdowns in China. These figures exceed our forecast of 88,101 units (down 2 per cent QoQ). As a result, according to ICICI Securities, the company could record a higher operating performance in Q3FY23.
However, retail volumes fell 3.7% year on year to 84,827 units. Encouragingly, the company is experiencing healthy demand for its products, with order book increasing to around 2.15 lakh units vs. 2.05 lakh units as of December 2022 end, with New Range Rover, Defender, and New Range Rover Sport accounting for approximately 74% of the orderbook, according to the brokerage firm.
However, during the last six months, Tata Motors has underperformed the market, losing 6% while the S&P BSE Sensex has risen 11%. Furthermore, the stock has fallen 18% in the last year, compared to a 0.03 percent advance in the benchmark index. It had reached a 52-week high of Rs 528 on January 18, 2022.