Tata Motors shares fall ahead of Q2 results; here's earnings preview

JLR owner Tata Motors Ltd is likely to report 25-42 per cent year-on-year (YoY) rise in net profit for the September quarter on a flattish sales. Analysts said the management commentary on high levels of passenger vehicle (PV) inventory, rising discounts and festive demand outlook would be key to watch out for. Ahead of quarterly results, Tata Motors shares were trading 0.97 per cent lower at Rs 811.85 on BSE.

PL Capital expects Tata Motors to report 28.4 per cent YoY surge in adjusted net profit at Rs 4,990 crore compared with Rs 3,887 crore in the same quarter last year. It sees sales rising 2.9 per cent YoY to Rs 1,08,171 crore compared with Rs 1,05,128 crore in the corresponding quarter of last year. Ebitda is seen rising 8.2 per cent to Rs 14,845 crore, with margin seen expanding 67 basis points to 13.7 per cent.

"Supply chain constraints to be partially offset by lower penetration of Jaguar portfolio which could result in Ebitda margin expansion by 67 bps YoY," PL Capital said.

Elara Securities said Tata Motors' Q2 profit may come in at Rs 5,352 crore, up 42 per cent YoY. It sees 1.1 per cent rise in sales at Rs 1,05,128 crore. Tata Motors' PV segment saw a sharp improvement in model mix, lifting average selling price (ASP) QoQ, it noted.

Sharekhan sees Q2 profit at Rs 4,807 crore against Rs 3,845 crore YoY, up 25 per cent. It sees sales falling 3.9 per cent YoY to Rs 1,01,070 crore against Rs 1,05,128 crore YoY.

BNP Paribas said lower wholesale volume at JLR may hurt Tata Motors. It sees the potential for negative surprises. The management commentary on high levels of PV inventory, rising discounts and festive demand outlook would be key to watch out for in 2QFY25, it said.

"That said, given the weakening auto demand globally (and recent guidance cut by global peers), we now see a risk of JLR cutting its FY25 guidance, eventually pushing next-year’s guidance by a year," it said.