“Tata Motors standalone sales will remain broadly flat on QoQ due to flat volumes. The EBITDA margin is expected to increase by ~80 basis points. RM costs decrease. We expect JLR volumes to grow in the mid-single digits, led by order book servicing and semiconductor supply improvement. EBITDA margin is expected to improve by ~100 basis points sequentially,” said Prabhudas Lilladher.
Kotak Institutional Equities estimates that revenue from TaMo’s standalone business will decline 1% qoq in Q2, driven by a 1% qoq drop in average selling price due to substandard mix.
The brokerage firm expects its EBITDA margin to improve to 5.6% in Q2 from 4.7% in Q1 FY23, led by commodity benefits.
Tata Motors PV business EBITDA is expected to improve by 120 basis points QoQ. “We are also building a 510 basis points QoQ EBITDA margin improvement for the JLR business driven by operational leverage benefits and favorable geographic mix (higher mix from China) and FX movements in 2QFY23,” it said.
HDFC Securities expects Tata Motors to post another loss on a consolidated basis in the second quarter due to the poor performance of JLR. Sharekhan has estimated the quarterly consolidated net loss at Rs 324 crore.
“We expect consolidated sales to grow 12.5% q/q to Rs 80,927 crore, led by a 21% increase (in sterling terms) in JLR revenue, partly offset by a decline in standalone business at Rs 2% is offset,” Sharekhan said. also expects JLR’s volumes to improve due to some improvements in semiconductor shipments year-on-year and QoQ. Volumes could be slightly below management’s forecast of 90,000 units.
The brokerage firm has downgraded expected earnings per share by 20% due to the reduction in JLR volume, higher interest costs and GBP:INR translation effects.
“Expect India QoQ EBITDA margin to improve due to price increases and operational leverage. Expect EBIT margin for JLR to improve significantly year-on-year and in the quarter due to improved mix and operational leverage,” said Motilal.
Even though the stock is down over 13% over the past year, a majority of 20 out of 30 analysts covering the stock have strong buy ratings. Trendlyne data shows that only 2 analysts have issued a sell recommendation for Tata Motors to date.
(Disclaimer: Experts’ recommendations, suggestions, views and opinions are their own. These do not represent the views of Economic Times)
https://economictimes.indiatimes.com/markets/stocks/earnings/tata-motors-q2-results-tomorrow-heres-what-to-expect/articleshow/95379834.cms tata motors: Tata Motors Q2 results tomorrow: Here’s what to expect