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Shares of Tata Motors rose as much as 4.1% 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% 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% 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% 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%.
(Reporting by Varun Vyas in Bengaluru; Editing by Sohini Goswami and Eileen Soreng)
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