Why Tata Motors Stock Has Rallied 30% Over The Last Week

Tata Motors (NYSE: TTM) – the Indian automotive company that owns the Jaguar and Land Rover luxury car brands– has seen its stock rally by 30% over the last week. The gains were driven partly by strong Q2 results (FY ends March), with the company benefiting from a significant improvement in the Jaguar Land Rover (JLR) business, which accounts for over 75% of its total revenue. While JLR’s deliveries remained almost flat year-over-year, EBITDA margins saw a meaningful uptick over the quarter, rising 480 basis points YoY to 13.8%, driven by a recovery in its Chinese business, a more favorable product mix, and the implementation of its restructuring program. Although we believe that the company still faces significant uncertainty amid concerns of a slowdown in the global economy and the challenges related to Brexit, the quarterly surprise is likely to have improved interest in the stock which remains down by over 60% over the last 2 years. Below, we take a look at how the company’s revenues have trended in recent years and the outlook for the company over the next few years.

View our interactive dashboard analysis on Why Did Tata Motors Stock Rally 30% Over The Last Week?

Tata Motors’ Total Revenues

JLR Revenue Expected to Continue Falling With Brexit Uncertainty And Global Auto Market Slowdown

JLR revenue has been fluctuating due to the Brexit uncertainty and current global auto market slowdown. For FY 2020 (ended March 2020) we expect revenue to be around $32.2 billion while it is expected to decline further to $31.5 billion and $30.9 billion in FY 2021 and FY 2022.
Total Shipments have also been affected and have been falling for the past 3 years. For FY 2020 (ended March 2020) we expect shipments to be around 565.3K while they are expected to reduce further to 531.9K and 515.9K in FY 2021 and FY 2022. Meanwhile, revenue per shipment saw a rise for the past 3 years. For FY 2020 (ended March 2020) we expect the metric to continue its trend and reach around $58.7K while it is expected to increase further to $59.2K and $59.8K in FY 2021 and FY 2022.

Tata Motors Rising Shipments Pushing Revenue Growth In the Domestic Market

For more information on Tata Motor’s revenues in the domestic market, view our interactive dashboard analysis.

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