• Tue. Feb 27th, 2024
Tata Motors Q1 results preview: Net profit at ₹ 2,600 crore, JLR margins to expand

Tata Motors Q1 Results Preview: Automobile major Tata Motors is likely to report a strong financial performance for the quarter ended June 2023 on the back of improving margins and healthy sales of its luxury arm Jaguar and Land Rover (JLR).

Tata Motors Q1 Results Preview: Automobile major Tata Motors is likely to report a strong financial performance for the quarter ended June 2023 on the back of improving margins and healthy sales of its luxury arm Jaguar and Land Rover (JLR).

Tata Motors Q1 net profit expected 2,600 crore compared to a loss of Rs 5,731 crore in the same quarter last year, according to average analyst estimates.

Tata Motors Q1 net profit expected 2,600 crore compared to a loss of Rs 5,731 crore in the same quarter last year, according to average analyst estimates.

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The company’s consolidated revenue is expected to grow by around 43% in Q1FY24. 1,03,284 crore driven by strength at JLR. Tata Motors’ PV division posted 8% volume growth in the quarter.

Luxury carmaker JLR is expected to post 30% annual growth on the back of improved production standards, easing chip shortages and continued traction towards new models.

Volumes in the domestic passenger vehicle (PV) industry grew by around 8% YoY in Q1FY24, driven by a surge in production and continued interest in SUVs.

Q1 Consolidated Earnings, Interest, Taxes, Depreciation and Amortization (EBITDA) Rise 11,137 crore.

MK Global EBITDA margin is expected to decline by 90 bps QoQ to 11.2%, mainly due to unfavorable mix and lower volumes in standalone (India CV) operations.

“Revenues are likely to grow year-on-year due to strong growth in JLR and PV divisions. EBITDA margin is expected to decline on QoQ basis, mainly driven by unfavorable mix and lower volumes in standalone (CV) business vertical,” the brokerage house said.

Meanwhile, EBIT margin for JLR is estimated to be 5.6% in the quarter under review compared to -4.4% YoY, supported by favorable product mix, lower raw material costs and cost containment.

“Tata Motors’ business performance in India was a mixed bag as CV volumes declined by 15% due to the impact of pre-buy in FY23, while PV grew by 8% year-on-year. However, lower raw material prices, cost containment and operating leverage (in PVs), CV/PV’s EBIT margin is likely to expand by 90 bps/190 bps in Q1FY24,” said domestic brokerage house Motilal Oswal Financial Services.

The brokerage firm raised FY24 and FY25 EPS estimates by 8.7% and 11.6% respectively, attributed to 9% and 11% upgrades at JLR and better visibility for the India business.

Tata Motors share price has risen sharply this year. The stock has gained 64% YTD and is up nearly 35% in three months.

Tata Motors shares touched a 52-week high on Tuesday 639.70 apiece on the BSE after gaining over 1.6 percent in opening trade ahead of Q1 results.

Disclaimer: The above views and recommendations are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before making investment decisions.

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