Tata Motors stock rallies for 2nd day amid improved JLR sales and Tesla rumours

Tata Motors stock rallies for 2nd day amid improved JLR sales and Tesla rumours

Mumbai: The stock of Tata Motors rallied more than 10% for the second straight day on the back of improved sales in the domestic business as well as at UK subsidiary Jaguar Land Rover and speculation of a partnership with US-based electric carmaker Tesla.

Shares of Tata Motors recorded a fresh 52-week high of Rs 249.5 on the BSE during trading on Wednesday before correcting to Rs 241.9 as of 1:30 pm. On Tuesday, the stock closed at Rs 220.1, a gain of 11.1% over the previous day’s closing price.

The company’s American Depositary Receipts (ADRs) on the NYSE were up 16.31% on Wednesday. ADR represents the securities of a foreign company that trade in the US markets.

Jaguar Land Rover said Tuesday that its sales for the October-December quarter improved by 13.1% over the preceding quarter even though they were down 9% year-on-year. Sales in China, the company’s second largest market after North America, recovered to pre-Covid levels and were up 20.2% on the prior quarter and 19.1% year-on-year.

The luxury carmaker accounts for over 80% of Tata Motors’ consolidated revenue.

Meanwhile, Tesla Inc has been one of the highest rallying stocks in the past one year, growing by about 700%. A rumoured association between the two companies gave a boost to Tata Motors’ stock as well.

However, Tata Motors denied any association with Tesla and said that it is yet to finalise a partner for its passenger vehicle business.

“Tata Motors has not taken any decision regarding a strategic partner for its PV (passenger vehicles) business and categorically denies any and all rumours suggesting the same,” the company said in a statement.

Analysts tracking the company said that the stock also benefitted from the improvement in Tata Motors’ domestic business.

“While the sales in the domestic PV business have been good for quite some time, recovery has been seen even in the commercial vehicles business, especially in the MHCV segment (medium and heavy commercial vehicles). This has also benefitted Ashok Leyland,” said Mitul Shah, head of research, Institutional Equity at Reliance Securities.

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