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Tata Motors share price rallies 15% on Q2 earnings, equity raising plans

The Indian carmaker reported a loss in September quarter, dented by weak volume growth in India, although the quarterly net loss narrowed and the company board approved fundraising plans to reduce debt. Additionally, brokerages have upgraded the stock and increased their targets

twitter-logo BusinessToday.In        Last Updated: October 29, 2019  | 11:17 IST
Tata Motors share price rallies 15% on Q2 earnings, equity raising plans
Company's subsidiary Jaguar Land Rover rebounded with 8% year-on-year increase in revenue for the September quarter, driven by higher wholesales and a favourable product mix.

Tata Motors share price extended gains for the second consecutive session after Sunday's Diwali Muhurat trade and rose another 15% to Rs 170 today after posting a turnaround in September earnings on Friday.

Tata Motors share price rose 18% to Rs 150 on Sunday. US-listed shares of the Indian carmaker had surged 13.2% on Friday.

The Indian carmaker reported a loss in September quarter, dented by weak volume growth in India, although the quarterly net loss narrowed and the company board approved fundraising plans to reduce debt. Company's subsidiary Jaguar Land Rover rebounded with 8% year-on-year increase in revenue for the September quarter, driven by higher wholesales and a favourable product mix. Additionally, brokerages have upgraded the stock and increased their targets.

On a consolidated basis, the country's largest automobile manufacturer posted a lower-than-expected net loss of Rs 216.56 crore, while revenue declined 9.15 per cent to Rs 64,763.39 crore during the quarter under review.

Tata Motors stock today opened with a gain of 2.4% against the Sunday's close of Rs 147.95. The stock rose 15.11% intraday on BSE to Rs 170.3.

Tata Motors has moved above its 150 and 200-day simple moving average today, while the stock price was already higher than its 5, 20, 50, 100-day moving averages. Volume-wise, shares amounting to 47 lakhs and 105 lakh shares changed hands on BSE and NSE, both above the 5, 10, and 30-day average volume traded. According to market depth data, there is 45% buying against 55% selling in the share, indicating profit-booking by traders.

The stock has risen about 28% in one week, 41% in one month but fell 2% on an year-to-date basis.

Tata Motors announced in a regulatory filing about the approval of the board of directors for the raising of Rs 6,500 crore through preferential allotment of ordinary shares and warrants to the promoter, besides Rs 3,500 crore financing through external commercial borrowing, to meet repayments, refinancing and working capital requirements. This would reduce leverage and improve debt to equity ratio.

By Rupa Burman Roy

Tata Motors' gross debt zooms to Rs 1.18 lakh crore amid losses

Tata Motors posts standalone loss of Rs 1,282 crore in Q2 on weak India biz, revenue dips 44%

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