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Informist, Tuesday, Jul 30, 2024

By Darshan Nakhwa 

MUMBAI – Commercial and passenger vehicle manufacturer Tata Motors Ltd is expected to report a sharp expansion in net profit for the June quarter, even as its other earnings metrics are seen growing by just single-digits over the year-ago period. According to brokerages, higher sales of Jaguar Land Rover and commercial vehicles, a richer product mix, and lower raw material costs will power the automaker's financial performance for the quarter.

The consolidated net profit of Tata Motors is projected to grow 68.4% on year to 53.93 bln rupees. The topline for the quarter is estimated at 1.09 trln rupees, up 6.2% on year, according to the average of estimates from 10 brokerages. Among the estimates, the highest projection for net profit is 70.40 bln rupees and the lowest is 39.92 bln rupees. The highest and lowest estimates for revenue are 1.18 trln rupees and 1.03 trln rupees, respectively.

Nomura Equity Research expects the company's revenue from the commercial vehicles segment to grow 6.4% on year and that from JLR is seen up 6% on year. However, net sales from the passenger vehicle business is seen flat on year.

The company's consolidated cash operating profit, or earnings before interest, tax, depreciation, and amortisation, is estimated at 149.39 bln rupees for, compared with 146.81 bln rupees in the year-ago period and 178.72 bln rupees in Jan-Mar. Among the nine estimates, the highest projection for EBITDA is 161.26 bln rupees and the lowest is 137.60 bln rupees. 

According to estimates from seven brokerages, EBITDA margin of Tata Motors is seen in the range of 13.2-13.8%, compared to 14.4% in the year-ago period and 14.9% in Jan-Mar.

In terms of average selling price, the company's commercial and passenger vehicle prices are seen flat on year at 1.92 mln rupees per unit and 927,000 rupees, respectively. In comparison, the average selling price of JLR is likely to decline 4.1% on year to 70,975 pound sterling.

On a sequential basis, Tata Motors is likely to report a weak financial performance on account of decline in overall sales. The automaker's bottomline for the quarter is projected to dive 69% from 174.07 bln rupees in Jan-Mar. In the comparable period, the company had reported a threefold increase in the metric on the back of deferred tax asset. The automaker's topline is seen down 9.5% from 1.20 trln rupees in the March quarter, and EBITDA is likely to decline by 16.5% from 179 bln rupees.

WHOLESALE VOLUMES

The company's global wholesale volumes, including of Jaguar Land Rover, rose 2% on year to 329,847 units in Apr-Jun. While sales of commercial vehicles, including the Tata Daewoo range, rose 6% on year to 93,410 units, the company's passenger vehicle despatches fell 1% on year to 138,682 units.

The automaker's subsidiary Jaguar Land Rover sold 97,755 vehicles in Apr-Jun, 5% higher than in the year-ago period. It dispatched 8,227 units of Jaguar-branded vehicles during the quarter, and 89,528 units of Land Rover-branded vehicles.

Tata Motors' standalone sales volume, including exports and domestic dispatches, rose 1.6% on year to 229,891 units. The total sales volume was driven by mid-single digit growth in commercial vehicle dispatches, even as passenger vehicle volumes declined by slightly over 1%. On the exports front, the automaker despatched 3,594 commercial vehicles in Apr-Jun, up 1% from the year-ago period. Its passenger vehicle dispatches surged 75% to 578 units.

Tata Motors is scheduled to detail its earnings for Apr-Jun on Thursday. Today, shares of the automaker closed at 1,161.85 rupees on the National Stock Exchange, up 3.4% from the previous close.

Following are the Apr-Jun consolidated earnings estimates for Tata Motors, in mln rupees, from 10 brokerages:

End

Reported by Darshan Nakhwa 

Edited by Ashish Shirke

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