Tata Motors, IDFC First Bank, JK Tyre rally over 50% in one month

Shares of Tata Motors, IDFC First Bank, Tata Elxsi, Trident, JK Tyre & Industries and Sobha, from the S&P BS500 index have surged over 50 per cent in the past month on the back of a strong rally in the equity markets. In comparison, S&P BSE500 index has gained 11 per cent, while the benchmark S&P BSE Sensex was up 10 per cent during the month.

Tata Motors hit a 31-month high of Rs 295, up 7 per cent in the intra-day deals today, and was the top gainer among the list. The stock has zoomed 80 per cent in the past one month on Tesla tie-up buzz. The stock of the Tata Group commercial vehicles company was trading at its highest level since June 2018. Moreover, its market capitalisation swell to Rs 90,708 crore at 11:40 am, inching towards the Rs 1-trillion mark.

The stock has managed to hold investor interest despite denying reports that it’s planning to sell its stake in the domestic passenger vehicle (PV) business. In the past seven trading days, the stock has rallied 26 per cent on report that Tesla may choose Tata Motors for its much-awaited India foray. “Tata Motors has not taken any decision regarding a strategic partner for its PV business and categorically denies any and all rumours suggesting the same,” Tata Motors said on January 12, in exchange filing.

That apart, shares of JK Tyre & Industries soared 13 per cent hit hit its fresh 52-week high of Rs 120 today. The stock has surged 33 per cent in two days ahead of its October-December quarter (Q3FY21) results today. In the past one month, the stock has rallied 69 per cent on expectation of a strong operational performance during the recently concluded quarter.

Last week, Cavendish Industries, a subsidiary of JK Tyre & Industries, reported record performance for Q3 as Ebitda jumped 128 per cent year-on-year (YoY) to Rs 157 crore. Sales were up 30 per cent YoY at Rs 788 crore over the previous year quarter. The management said increased volumes in truck tyres, both radial and bias, LCV and agricultural tyres have contributed to higher sales.

“The demand recovery in the market is quite robust across segments. The larger commercial tyres are also moving well with replacement demand clocking 30 per cent growth and OEMs offtake slowly coming back. Cavendish looks forward to sustained improvement in sales and profitability in the coming period,” said Dr Raghupati Singhania, chairman of the company.

Lastly, the stock of IDFC First Bank hit a 52-week high of Rs 52, soaring 52 per cent in the past one month, after the bank reported strong retail loan growth for Q3FY21. While overall funded assets of the bank increased 0.7 per cent YoY to Rs 1.10 trillion in Q3FY21, retail assets grew 24 per cent YoY (11 per cent quarter on quarter (QoQ)) to Rs 66,635 crore. Retail Funded Assets, including the PSL Buyouts, thus constitute 64 per cent of overall Funded Assets, IDFC First Bank said in Q3 update. Motilal Oswal Financial Services believe the strong traction in retail loans was aided by festive demand and an improved economic outlook.

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