“Tata Motors’ standalone revenue to largely remain flat QoQ owing to flat volumes. EBITDA margin to expand by ~80bps RM cost easing out. We expect JLR volumes to grow in mid-single digit led by servicing of order book and semiconductor supply improving. EBITDA margin to improve by ~100bps sequentially,” Prabhudas Lilladher said.
Kotak Institutional Equities estimates TaMo’s standalone business revenues to decline by 1% QoQ in Q2 led by 1% QoQ decline in average selling price due to inferior mix.
The brokerage expects EBITDA margin to improve to 5.6% in Q2 from 4.7% in Q1 FY23 led by raw material benefits.
Tata Motors’ PV business EBITDA is expected to improve by 120 bps QoQ. “We are also building in a 510 bps QoQ improvement in EBITDA margin for the JLR business due to operating leverage benefits and favorable geographical mix (higher mix of China) and FX movement in 2QFY23,” it said.
HDFC Securities expects Tata Motors to post loss again in Q2 on a consolidated basis due to weak performance at JLR. Sharekhan has estimated the quarterly consolidated net loss figure at Rs 324 crore.
“We expect consolidated revenue to grow by 12.5% q-o-q to Rs 80,927 crore led by 21% increase in JLR revenues (in Pound terms), partially offset by 2% decline in standalone business,” Sharekhan said.
also expects JLR volumes to improve YoY and QoQ due to some improvement in semiconductor supplies. Volumes may be marginally lower than the management’s guidance of 90,000 units.
The brokerage has downgraded the expected EPS by 20% due to reduction in JLR volumes, higher interest cost, and the translation impact of GBP:INR.
“Expect India EBITDA margin to improve QoQ due to price hikes and operating leverage. Expect EBIT margin for JLR to improve substantially on a YoY and QoQ basis due to improving mix and operating leverage,” Motilal said.
Even as the stock is down over 13% in the last one year, a majority of 20 analysts out of 30 with coverage on the scrip have strong buy ratings. Trendlyne data shows that only 2 analysts have sell ratings on Tata Motors so far.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
