Tata Motors shares hit 52-week high ahead of Q4 earnings: Here are 5 brokerages' estimates

Shares of Tata Motors rose during the early trading session on Friday ahead of its earnings for the period ended on March 31, 2023, scheduled to be released later in the day. The homegrown auto major's company board will also consider a dividend for the shareholders after a span of seven years.

Shares of Tata Motors rose about 2 per cent to hit a 52-week high at Rs 520.40 on Friday, before giving up its gains partially. The Tata Group's auto arm commanded a total market capitalization of more than Rs 1.71 lakh crore. The scrip had settled at Rs 511.65 on Thursday.

According to analysts, Tata Motors is likely to report a profit in the range of Rs 2,200-4,200 crore, thanks to a surge in JLR volumes on a yearly basis due to easing chip shortages and continued traction toward new models. The automaker's India business saw healthy growth, led by strong growth in personal vehicles (PVs) and commercial vehicles (CVs), added with margin expansion for the quarter.

Tata Motors is likely to return to black on a year-on-year (YoY) basis in March 2023 quarter, while its EBITDA margin is seen in lower double digits, growing about 70-80 basis points (bps) on a quarter-on-quarter (QoQ) basis. The company's performance is likely to remain firm, thanks to improved scales and prices across all three key segments.

ICICI Securities expects Tata Motors to report a revenue of Rs 1,05,748.4 crore, rising 35 per cent YoY and 20 per cent QoQ; with an EBITDA at Rs 14,401.7 crore, up 65 per cent YoY and 30 per cent QoQ; and its PAT is seen at Rs 5,641.4 crore, jumped 85 per cent QoQ. ICICI Securities has a 'buy' rating on Tata Motors with a target price of Rs 608 as it remains among its top picks.

Tata Motors is likely to register a 37 per cent consolidated revenue growth, driven by strong growth across JLR (53 per cent), CVs (18 per cent) and PVs (7 per cent). Consolidated EBITDA margin should expand by 140 bps, led by higher production in JLR and supported by a strong margin performance in CVs, said Emkay Global.

JLR’s GBP revenue is expected to grow by 53 per cent YoY to GBP 7.3 billion, owing to higher volumes and realizations. 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 Rs205 billion, driven by higher realizations. The realization to improve due to higher MHCV share and price hike, Emkay said.

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.

In CVs, Tata Motors has underperformed all four segments in Q4, said HDFC Securities. "JLR margins are likely to improve 150 bps QoQ to 13.4 per cent on the back of good pick up in volumes," it said. However, according to the brokerage, its exports may take a hit.

HDFC Securities sees Tata Motors' revenue at 1.03 lakh crore up 31.5 per cent YoY and 16.6 per cent QoQ. The company is likely to see an EBITDA margin of 14.6 per cent, falling 10 bps YoY but up 70 bps QoQ. PAT is seen at Rs 3,100 crore, rising 49.4 crore QoQ.

Tata Motors is expected to register a QoQ improvement in EBITDA margin in all three divisions- JLR, domestic PV and CV said Sharekhan by BNP Paribas. "We expect Tata Motors (PV division) to register 30 bps QoQ expansion in EBITDA margin. Tata Motors (CV division) is expected to report a 60-bps QoQ expansion in EBITDA margin in Q4FY23," it said.

Sharekhan pegs the company's revenue at Rs 1.04 lakh crore, up 33.1 per cent YoY and 18 per cent QoQ, with profit at Rs 2,841.6 crore, surging about 60 per cent QoQ. The company may report an EBITDA margin of 11.2 per cent, up 9 bps YoY and 33 bps QoQ. Its target price of Rs 516 was hit on Friday.

Prabhudas Lilladher expects a revenue growth of 23 per cent helped by strong volumes and higher ASP across segments. Volume ramp-up at JLR is expected to help revenues, profitability and drive FCF generation aided by a strong order book. Overall volume has grown by c28% QoQ and EBITDA margin is at 11.6, per cent.

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