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Q3FY23 Preview: Tata Motors: Revenue seen at Rs853,460 million, PAT at Rs1,723 million

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:

  • Demand outlook across key markets and segments
  • Margin outlook along with key levers thereof
 

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

 

Related Tags

  • JLR
  • Tata Motors
  • Tata Motors Q3
  • Tata Motors Q3 preview
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