Tata Motors rallies 6% as JLR wholesales jump 15% YoY in December quarter

Wholesale volumes were 79,591 units in the period (excluding the Chery Jaguar Land Rover China joint venture), up 5.7 per cent compared to the prior quarter ended September 30, 2022 (Q2FY23) and 15 per cent compared to the same quarter a year ago (Q3FY22), Tata Motors said in a release.

Tata Group’s passenger cars & utility vehicles maker said that the company continues to see strong demand for its vehicles. As of Q3FY23, the total order book increased to 215,000 client orders, up around 10,000 orders from Q2FY23. Demand for the New Range Rover, New Range Rover Sport and Defender remained strong and represent 74 per cent of the order book.

Meanwhile, Tata Motors said on a preliminary basis, free cash flow is likely to be over £400 million positive in the quarter. In December 2022, the company completed a renewal of its undrawn revolving credit facility with 23 banks at £1.45 billion with the maturity date extended from March 2024 to April 2026. JLR expects to report unaudited results for Q3FY23 on January 25, 2023.

Wholesale dispatches comes as positive amid news flow during the quarter over persisting chip supply constraints and Covid-led lockdowns in China. These numbers are ahead of our estimates of 88,101 units (down 2 per cent QoQ). Hence, the company could report a better operating performance in Q3FY23, ICICI Securities said in a note.

On the retail front, volumes were, however, down 3.7 per cent QoQ at 84,827 units. Encouragingly, the company is witnessing 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 around 74 per cent orderbook formed by New Range Rover, Defender and New Range Rover sport, the brokerage firm said.

However, in past six months, Tata Motors has underperformed the market by falling 6 per cent, as compared to 11 per cent rally in the S&P BSE Sensex. Further, in past one year, the stock has slipped 18 per cent, as against a marginal 0.03 per cent rise in the benchmark index. It had hit a 52-week high of Rs 528 on January 18, 2022.

Technical View

Bias: Negative

Target: Rs 375

Resistance: Rs 415; Rs 421

Support: Rs 398

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Shares of Tata Motors were trading below its 20-DMA (Daily Moving Average) since early December. Since then the stock declined almost 11 per cent as of January 09.

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However, today’s sharp up move has seen the stock bounce back above the 20-DMA, and now seen testing resistance at its 50-DMA at Rs 415, above which the next hurdle shall be Rs 421 – the 100-DMA.

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Overall, the bias on the basis of price-to-moving averages remains negative as the shorter-term moving averages were hovering below the longer-term moving averages.

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On the downside, the stock is likely to revisit the recent lows of Rs 375-odd level. In the interim, the 20-DMA at Rs 398 could provide good support.

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(With inputs from Rex Cano)