Q2 Results Preview: Tata Motors

Impacted by weakness in passenger and commercial vehicle demand, Indian automaker Tata Motors’ revenue is expected to decline in Q2. 

According to analysts, during the quarter Tata Motors was also impacted by weakness in JLR demand and supply constraints. 

“Consolidated INR revenue to decrease c4 per cent year-on-year on weakness in JLR, PV and CV volumes. Expect the EBITDA margin to expand slightly by c8bp y-y to 13.1 per cent (-122bp q-q) on a better model and region mix at JLR y-y. Expect JLR revenue to decrease 6 per cent y-y, with EBITDA margin contracting c103bp y-y and 194bp q-q to 13.9 per cent, as we see higher incentivisation to impact gross margins at JLR,” stated BNP Paribas.

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Analysts would keep an eye on the demand outlook across vehicle segments. 

“Passenger vehicle and commercial vehicle volumes declined 5 per cent and 19 per cent year-on-year in the India business. Commercial vehicle margin likely to remain flat year-on-year while JLR volume to see 4 per cent year-on-year decline due to supply challenges,” mentions Motilal Oswal. 

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Mumbai-headquartered Tata Motors reported a 74 per cent increase in its consolidated net profit with ₹5,566 crore in the June quarter as opposed to ₹3,203 crore reported during the same quarter last year.