For the first time since September 2018, Tata Motors surpassed Kia Corporation’s market capitalization on Monday, becoming the 16th most valuable carmaker globally. Tata Motors is barely below Hyundai Motor, with a market value of $27.15 billion.
After its Jaguar Land Rover (JLR) unit announced a 30% year-over-year (y-o-y) gain in global wholesale dispatches in the June quarter of the current financial year, Tata Motors shares—the Nifty50’s best performer for the year—hit yet another record high on Monday.
JLR is anticipated to have a positive free cash flow of over £400 million when it releases its financial results for the quarter later this month.
On the other hand, Morgan Stanley increased its target price for the stock from Rs. 617 per share to Rs. 711 per share due to better margins, noting that the company’s free cash flow of £400 million in a quarter with traditionally low free cash flow was a welcome surprise. In the opinion of the international brokerage, “Continued free cash flow improvement will give the market more confidence in Tata’s de-leveraging story.”
Tata Motors, the best-performing company on the Nifty50 so far this year, has increased by as much as 60%, outpacing Kia Corporation’s gains of 48%.
While the high-margin Range Rover and Range Rover sports models make up 76 percent of Tata Motor’s order book, the US accounts for roughly 25 percent of Kia’s overall income, followed by Korea at about 20 percent.
The remaining 45 percent of Kia’s total revenue is produced by Europe and other regions, with another 5 percent coming from India and China.
Since April 2020, Tata Motors’ shares have increased more than ninefold, helping the company close the gap with the Korean automaker. Kia Motors’ market valuation in April 2020 was above $10 billion, three times greater than Tata Motors’.
