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Tata Motors share trading higher ahead of Q4 earnings, here's what to expect

Tata Motors share touched an intraday high of Rs 332, rising 3.42% against previous close of Rs 321 on BSE

twitter-logoBusinessToday.In | May 18, 2021 | Updated 12:08 IST
Tata Motors share trading higher ahead of Q4 earnings, here's what to expect
Tata Motors stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Tata Motors share was trading higher in early session ahead of the auto major's Q4 earnings set to be announced today. The stock has gained 5.14% in the last 2 days. The large cap stock touched an intraday high of Rs 332 rising 3.42% against previous close of Rs 321 on BSE.

Tata Motors stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The share has risen 309% in one year and climbed 80% since the beginning of this year. Market  cap of the auto firm rose to Rs 1.18 lakh crore on BSE.

Total 16.65 lakh shares changed hands amounting to turnover of Rs 54.75 crore on BSE.

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The stock hit 52-week high of Rs 357 on March 3, 2021 and 52-week low of Rs 79.60 on March 18, 2020.

Here's a look at how Tata Motors is expected to perform in March quarter.

Nomura forecasted around 96 per cent YoY standalone revenue growth, driven by around 89 per cent growth in overall volumes, price hikes, and better mix.

Ebitda margins should improve 100 bps QoQ to 6.8 per cent on operating leverage benefit and cost control, partially offset by higher commodity prices, the brokerage said.

Revenue is seen growing around 21 per cent YoY for JLR.

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"However, realisations should decline 7 per cent QoQ on weaker product and geography mix. This should lead to a 90 bps QoQ decline in its adjusted Ebitda margin to 13.5 per cent despite operating leverage benefit sequentially. We estimate another 1.5 billion pounds of restructuring costs for the quarter," it said.

Tata Motors' revenue is expected to rise by 41 per cent on a year-on-year basis (YoY) to Rs 88,322.2 crore from Rs 62,493 crore reported in the year-ago quarter.

The firm is expected to post net profit of Rs 2,813.1 crore as compared to loss of Rs 5,411.2 crore in Q4FY20. On the operational front, Nomura has pegged the firm's earnings before interest, tax, depreciation, and amortisation (Ebitda) at Rs 11,880.6 crore, up 401 per cent YoY and 3 per cent QoQ. EBITDA margin may expand 965 bps YoY at 13.5 per cent.

Kotak Securities

Kotak Securities sees Tata Motors' standalone revenues to climb by 22 per cent QoQ. "We build in standalone Ebitda margin of 5.8 per cent (flat QoQ YoY) led by operating leverage benefits which could likely offset 210 bps QoQ decline in gross margin," the brokerage said.

"We expect JLR revenues (ex China JV) to increase by 23 per cent YoY led by 25 per cent YoY increase in average selling price (ASPs) in Q4FY21 due to positive geographical mix. We expect reported Ebitda margin to decline by 30 bps QoQ to 15.4 per cent," it said.

On a consolidated basis, the brokerage is building a 41 per cent YoY growth in the company's net sales at Rs 88,110 crore while net profit is expected at Rs 2,721.7 crore in Q4.  The brokerage sees Tata Motors reporting EBITDA at Rs 12,872.8 crore, up 442.4 per cent from Q4FY20, while EBITDA margin may come in at 14.6 per cent.

Emkay

"JLR's GBP revenues should rise 2 per cent on better volumes, while Ebitda margin should contract due to GBP appreciation, adverse mix (lower share of China region and Land Rover models) and high base due to one-offs relating to VMEs and emission provisions in the previous quarter," Emkay said.

The brokerage expects the company's standalone revenues to rise 27 per cent, led by higher volumes and realisations (5 per cent). Despite commodity inflation, the company's standalone Ebitda margin is expected to rise by 200 bps to 7.8 per cent on better scale, price hikes, lower discounts and higher share of MHCVs.

Consolidated revenues, thus, are expected to rise 31.4 per cent YoY to Rs 82,120.4 crore while profit is seen at Rs 2,345.5 crore. According to the brokerage, consolidated EBITDA may rise 360 per cent to Rs 10,910.5 crore while operating margin is expected at 13.3 per cent (up 949 bps YoY but down 193 bps sequentially).

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