24 Jan 2023 , 10:25 AM
Result date: 25th January, 2023
Recommendation: Buy
Target price: Rs530
The JLR business witnessed volume growth (ex-China JV) of 15% over the year-ago quarter and 6% sequentially. Sales mix remained favorable with share of “RR + RR Sport and Defender” up from 45% to 65% on a sequential basis. Improvement in model mix and operating leverage are key margin tailwinds, while reduction in China share from 17.6% to 14.6% QoQ is a key margin headwind on a sequential basis.
Sales volumes of the domestic business grew 14% over the year-ago quarter, but fell 6% sequentially. Fall in commodity prices and price hikes are prominent margin tailwinds while negative operating leverage is a key margin headwind sequentially.
Analysts at IIFL Securities expect Consolidated revenue of Tata Motors to grow 18% over the year-ago quarter and 7% sequentially.
Consolidated profitability of Tata Motors is likely to be impacted by a one-time impact from MTM of forex debt (GBP appreciation versus USD). Reversal in net loss of both JLR and domestic business could drive consolidated Profit After Tax (PAT) on a year-on-year basis.
Important management insights to watch out for:
December 2022 estimates |
YoY change |
QoQ change |
|
Revenue (Rs mn) |
853,460 |
18.2% |
7.2% |
EBITDA (Rs mn) |
86,831 |
28.4% |
40.1% |
EBITDA margin |
10.2% |
81 bps |
239 bps |
Profit After Tax (Rs mn) |
1,723 |
(109.0)% |
(127.2)% |
Source: IIFL Research
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