Q2FY23 Preview: Tata Motors: Consolidated revenue seen at Rs761,881 million, Net loss at Rs7,755 million

10 Nov 2022 , 10:13 AM

Result date: 11^th November, 2022
Recommendation: Buy
Target price: Rs585

Standalone volumes of Tata Motors grew 42% year-on-year (partly due to the base effect) and 5% sequentially. This, along with price hikes could lead to 50% growth in standalone revenue over the year-ago quarter. Consolidated revenue though could grow at a smaller pace of 24%, after factoring in performance of JLR.

Margin performance is likely to be robust amid falling input prices, improving realizations and operating leverage. High discounts in the commercial vehicles segment though could cap margin gains.

Tata Motors’ results for the September 2022 quarter could have a one‐time charge on MTM of forex debt (GBP depreciation versus USD), which could also dent its profitability.

The company could post net loss on a consolidated basis.

Important management insights to watch out for:

• Demand trends across key markets
• Outlook on input costs, pricing action, margins

Standalone

	September 2022 estimates	QoQ change	YoY change
Volumes	243,392	5.2%	42.1%
Revenue (Rs mn)	276,998	4.4%	50.2%
EBITDA (Rs mn)	17,779	26.9%	182.9%
EBITDA margin	6.4%	114 bps	301 bps
Profit After Tax (Rs mn)	4,248	(1273.7)%	(169.8)%

Source: IIFL Research

Consolidated

Rs. Million	September 2022 estimates	QoQ change	YoY change
Revenue	761,881	5.9%	24.1%
EBITDA	64,600	103.1%	59.5%
EBITDA margin	8.5%	406 bps	188 bps
Profit After Tax	(7,755)	(86.5)%	(82.8)%

Source: IIFL Research