Tata Motors Star Performer Amid Market Crash: Key Levels, Trade Strategy?

By Malvika Gurung

Investing.com -- The domestic automaker stock Tata Motors (NS: TAMO ) was the best performer on benchmarks Nifty50 and Sensex on a day when the domestic market witnessed a bloodbath, zooming 8.2% in the session to hit the day’s high at Rs 453.4 apiece.

Shares of Tata Motors ended 6.34% higher at Rs 445.6 apiece in a dreadful session on Friday, thanks to better-than-expected earnings for the December quarter.

The auto behemoth posted a profit in Q3 FY23 after witnessing seven consecutive quarters of losses. 

Anuj Gupta of IIFL Securities has advised investors to continue holding the Tata stock and maintain a trailing stop loss at Rs 420/share. Those willing to buy the stock can pick it at current levels and maintain a buy-on-dips strategy till it is trading above Rs 420 levels, Gupta said.

“However, fresh investors must maintain a stop loss at Rs 398 apiece levels. It is expected to go up to Rs 500 levels in two to three months or by the end of the current fiscal,” he added.

The company’s consolidated net profit came at Rs 2,957.71 crore in the Dec quarter from Rs 1,516.14 crore in the year-ago period, while revenue from operations surged 22.5% YoY to Rs 88,488.59 crore, led by a better realisation in JLR and standalone business of the company.

Tata Motors’ EBITDA rose 11% YoY to Rs 9,900 crore, while the EBITDA margin shot up by 290 basis points QoQ at 13.9% in the quarter under focus, thanks to a 110 bps contraction in RM cost ratio and overall operating leverage.

The healthy performance of the company was backed by a strong order book, improved semiconductor chip supply, commodity prices and a better product mix.