The performance of the most prestigious Indian business group has been range bound so far. (file)
we are two months into 2023 and indian stock market has already turned completely upside down. Both the benchmark indices Sensex and Nifty have shown sharp moves on particular days.
The volatility comes as the Adani crisis continues to make headlines following the Hindenburg Research allegations.
This crisis has gone so deep that it has now raised questions on other Indian companies as well.
Amidst all this, the performance of the most prestigious Indian business conglomerate has been range bound so far.
several Tata group shares Has given negative returns in 2023 so far. Even the strongest Tata group companies like Titan and Nelco are down 5-20%.
Tata group worst performer ever in 2023
Around 17 out of 28 listed companies have failed to continue their strong performance in 2023.
However, some of his shares have performed well on the exchanges.
In today’s article, we will talk about two outliers of Tata Group who have managed to give good returns.
#1 Banaras Hotels
Banaras Hotel is a subsidiary of Indian Hotels Company. The company’s hotels include the Taj Ganga and Taj Nadesar Palace in Varanasi as well as The Gateway Hotel in Gondia, Maharashtra.
On the back of strong revenue reported for the December 2022 quarter, this lesser-known or hidden Tata Group stock is up 24% so far in 2023.
For the December 2022 quarter, the company reported a 46.7% increase in revenue to Rs 282.6 million (m). It had registered a revenue of Rs 192.7 million in the same quarter last year.
Meanwhile, net profit jumped 87.9% year-on-year to Rs 82.9m from Rs 44.1m a year ago.
For the quarter under review, Banaras Hotels reported its highest ever EBITDA. It also reported a 66.4% increase in EBITDA to Rs 126.6 million in the December 2021 quarter from Rs 76 million.
The company also doubled its EBITDA and grew revenue by 51% over pre-Covid levels for the first nine months of the current financial year.
These strong financial results were due to continued high demand and an increase in momentum at social events.
Banaras Hotels Financial Snapshot – 5 Years
Source: Equitymaster
As reflected in its December 2022 earnings, the company has bounced back with tourists starting to travel in full swing again.
it’s actually a debt free company,
The company is looking forward to expanding its properties with little or no debt.
Banaras Hotels share price performance so far in 2023
Data Source: BSE
#2 Tata Motors
Tata Motors is on the second place in the list.
Tata Motors is engaged in manufacturing products of passenger cars, trucks, vans, coaches and buses. The company is also the market leader in the electric passenger vehicle segment in India.
With a 14% increase in its share price in 2023 so far, Tata Motors is the second top performer of the group.
The rally comes after the company returned to profitability in the December 2022 quarter after seven consecutive quarters of losses.
For the December 2022 quarter, revenue grew by 22.9% YoY to Rs 896.1 bn.
It posted a consolidated net profit of Rs 30.4 billion in the December 2022 quarter, as against a loss of Rs 15.1 billion in the same quarter last year.
The gains were on the back of a strong order book, improved semiconductor chip supply, tempered commodity prices and improved product mix.
The December 2022 quarter turned out to be the best ever for passenger vehicle sales as Tata Motors witnessed its highest ever retail sales, crossing 50,000 units.
Over the past five years, the company’s sales have been flat, while its net profit has declined by 10.5%.
The decline was due to lower-than-expected supply of specialty chips and lower JLR sales.
Tata Motors Financial Snapshot
Source: Equitymaster
However, the wind has changed in the last few months with an improvement in chip supply.
In addition, demand for PV in general and JLR (Jaguar Land Rover) products in particular remains strong across key markets globally, although the macro environment is not supportive.
Furthermore, its India CV (commercial vehicle) business continues to be in a cyclical recovery and its outlook is positive.
The management has also made a strategic shift to demand-pull model to restore its double-digit margin.
Tata Motors signed a memorandum of understanding (MoU) with ride-sharing app Uber on 20 February 2023.
The two companies have entered into an agreement for 25,000 units of Tata Motor’s XPRES-T electric sedans for Uber India’s premium range of vehicles. This MoU is the largest four-wheeler EV fleet order in the Indian industry.
Also riding the Electric Vehicle (EV) megatrend, Tata Motors remains in the fast lane when it comes to Electric Vehicles (EV). The Tata Group is leading India’s EV revolution.
In addition, it has entered into a strategic partnership with Japanese semiconductor manufacturer Renesas Electronics Corporation to design, develop and manufacture semiconductor solutions for domestic and global markets.
Tata Motors share price performance so far in 2023
Data Source: BSE
Tata Group: The Path Ahead
Given the pace at which the Tata group is expanding, the conglomerate has firmly associated itself with the Indian people for more than 150 years and is unlikely to relinquish that position anytime soon.
The Tata Group has big goals for its next phase of growth.
With a renewed emphasis on India, the group plans to dedicate over 80% of its capital expenditure to local businesses over the next five years with an estimated investment of US$90 billion.
This includes Tata Power’s plan to spend more than US$10 billion over the next five years in renewable energy, a US$5 billion project to build giga factories, and its stakes in tech and electronics.
The group intends to manufacture 5G telecom gear and is also expanding its foray into the semiconductor space.
Two more group companies, Tata Play and Tata Technologies, are expected to go public in 2023.
Then there is Tata Electronics, which is touted as the next TCS of the Tata group. it will be interesting to keep an eye on IPOs are coming,
stay tuned.
Disclaimer: This article is for informationfor purposes only. This is not a stock recommendation and should not be consideredAs such.
This article is syndicated equitymaster.com
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