BENGALURU, July 26 (Reuters): Shares of Tata Motors rose as much as 4.1 per cent to a record high on Wednesday after the company reported a better-than-expected first-quarter profit and announced a plan to cancel its 'A' ordinary shares.
The automaker was the second-biggest gainer on the benchmark Nifty 50 index after engineering firm Larsen & Toubro.
The Mumbai-based company posted a consolidated net profit of 32.03 billion rupees ($391.3 million) for the April-June quarter, compared with a year-ago loss of 50.07 billion rupees.
That beat analysts' estimates of a profit of 26.29 billion rupees, per Refinitiv IBES data.
Its UK-based Jaguar Land Rover (JLR) unit, which accounted for 70 per cent of Tata Motors' revenue, benefited from strong demand for its higher-margin SUVs like the Range Rover and an improving supply of semiconductors after crippling shortages for several quarters.
JLR logged its highest production levels in nine quarters in April-June, while strong retail sales led to a 66 per cent surge in revenue.
"Strong free cash flow (FCF) generation is expected to support higher investments towards electrification at JLR," JM Financial Institutional Securities said in a note.
Kotak Institutional Equities increased its estimates for the company's consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) by 12 per cent to factor in the first-quarter performances of JLR and Tata Motors' domestic commercial vehicle business.
Separately from the results, Tata Motors said it will cancel its 'A' ordinary shares in a move to simplify its securities structure, sending Tata Motors DVR shares up nearly 17 per cent.
India's Tata Motors hits record high on Q1 profit beat, capital reduction plan
FE Team | Published: July 26, 2023 23:40:55
India's Tata Motors hits record high on Q1 profit beat, capital reduction plan
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