Tata Motors to share Q4 results today. Stock in focus as strong JLR sales may boost profit

Tata Motors Ltd is expected to report March quarter profit in the Rs 2,200-4,200 crore range, thanks to a surge in JLR volumes YoY due to easing chip shortages and continued traction toward new models. India business saw healthy growth, led by strong growth in personal vehicles (PVs) and commercial vehicles (CVs), analysts said who see sales surging 23-33 per cent YoY and margins expanding for the quarter.

Motilal Oswal expects the JLR owner to report a profit at Rs 2,711.30 crore. Sales for the Tata group company are seen rising 24.4 per cent YoY to Rs 97,550 crore. India business performance remains healthy, led by strong growth in PVs and CVs, while JLR volumes may grow YoY due to easing chip shortages and continued traction toward new models.

Sharekhan sees profit at Rs 2,841 crore. It sees sales rising 33 per cent YoY to Rs 1,04,405 crore.

Emkay Global expects Tata Motors to register a 37 per cent consolidated revenue growth to Rs 1,07,355, driven by strong growth across JLR (up 53 per cent), commercial vehicles(up 18 per cent) and PVs (up 7 per cent). Consolidated Ebitda margin should expand by 140 basis points, led by higher production in JLR and supported by a strong margin performance in CVs, it said.

The brokerage sees profit for the auto maker at Rs 3,953 crore and Ebitda margin at 12.5 per cent against 11.1 per cent YoY.

ICICI Securities said Tata Motors may report a healthy performance for the quarter, led by a recovery in wholesale volumes at JLR. Total sales volume at Indian operations was at 2.52 lakh units, up 10.4 per cent sequentially with JLR sales volume (including China JV) anticipated at 1.08 lakh units, up 16.6 per cent QoQ.

"On a consolidated basis for Q4FY23, we expect Tata Motors to report net sales of Rs 1.06 lakh crore, up 20 per cent QoQ. Ebitda in Q4FY23 is expected at Rs 13,664 crore with corresponding Ebitda margins at 12.9 per cent. JLR’s Ebitda margins are expected at 13.5 per cent in Q4FY23," it said while expecting profit at Rs 2,269 crore.

Tata Motors shares have jumped 30 per cent year-to-date. An average price target on the stock at Rs 543 suggests a 6 per cent potential upside on the counter.

Prabhudas Lilladher sees revenue growth at 23 per cent helped by strong volumes and higher average selling price (ASP) across segments. Volume ramp-up at JLR is expected to help revenues, profitability and drive free cash flow (FCF) generation aided by strong order book, it said.

"JLR’s revenue is expected to grow 53 per cent YoY to 7.3 billion pound, owing to higher volumes (up 24 per cent) and realisations (up 24 per cent). Ebitda margin to expand by 100 bps to 13.6 per cent due to better scale. India CV revenue to grow by 18 per cent YoY to Rs 20,500 crore, driven by higher realizations (up 22 per cent). India PV revenue to grow by 7 per cent to Rs 11,300 crore, driven by higher volumes (up 9 per cent). Ebitda margin may  contract by 80 bpss to 6.1 per cent," Emkay said.

To recall, Tata Motors' December quarter results were better than Street expectations. What analysts liked the most was JLR orderbook that stood tall at 2,15,000 units and also the fact that new order-bookings in December quarter were higher than retails. They also liked an improvement in net pricing in commercial vehicle (CV) division and said further improvement is likely in March quarter. What they did not like was uncertainty on supply chain. All eyes are now on March quarter results today.