Tata Motors shares fall for third session ahead of Q1 earnings today, here's what to expect

Shares of Tata Motors fell for the third straight session ahead of the auto maker's Q1 earnings set to be announced today. Tata Motors shares closed 2.19% lower at Rs 633.30 today against the previous close of Rs 647.50 on BSE. Market cap of the firm fell to Rs 2.33 lakh crore.

Brokerages are anticipating a weak performance by Tata Motors due to declining volumes in the India Passenger Vehicle (PV), Commercial Vehicle (CV), and Jaguar Land Rover (JLR) segments.

Brokerage Motilal Oswal expects a 10% year-on-year fall in India PV volumes and a 6% decline in CV volumes, citing weak demand, rising input costs, and higher discounts as contributing factors. JLR is also expected to experience a 10% reduction in volumes, partly due to halted shipments to the US, increased tariffs, and the phase-out of Jaguar. Motilal Oswal projects a consolidated EBITDA margin of 10.9%, with an adjusted PAT decline of 34% year-on-year to ₹3,632.6 crore.

Nuvama Institutional Equities notes a year-on-year revenue decline led by volume drops across the India PV/CV and JLR segments. The brokerage expects a 42% drop in Ebitda to ₹8,978.4 crore and a 50% decrease in adjusted PAT to ₹2,638.7 crore.

Kotak Institutional Equities sees a 680 basis points year-on-year fall in JLR's EBITDA margin to 9%, led by weak demand in the US and China. According to Kotak,  Ebitda margin is expected to decline by 20 bps Y-o-Y, driven by negative operating leverage and commodity headwinds, partly cushioned by favorable net pricing.

The domestic passenger vehicle Ebitda margin is expected to fall to 6.8%, reflecting a 100 basis points year-on-year decline. This is attributed to negative operating leverage, increased marketing expenditures linked to IPL, and commodity inflation. However, this is somewhat offset by a better product mix heavy on SUVs.

Kotak predicts consolidated net sales to drop by 9.3% year-on-year to ₹98,005.3 crore, with Ebitda at ₹9,012 crore and an Ebitda margin of 9.2%. These projections highlight the challenging environment faced by Tata Motors due to a combination of global demand issues and rising operational costs.