Q3FY24 Preview: Tata Motors: Revenue seen at ₹1,091,974 Million, PAT at ₹52,501 Million

31 Jan 2024 , 02:39 PM

Result date: February 2, 2024

Recommendation: Buy

Target price: ₹830

Tata Motors witnessed 3% year-on-year growth in standalone sales volumes during the December quarter. This metric declined 3% sequentially. JLR (Jaguar Land Rover)’s sales volume (excluding China joint venture) grew 27% over the year ago quarter and 4% sequentially. The company’s consolidated revenue could grow 23% on a year-on-year basis and 4% sequentially, amid higher net pricing in domestic markets and higher sales mix of “RR+RR Sport”.

Analysts at IIFL Capital Services believe consolidated EBITDA margin of Tata Motors could improve both relative to the year-ago quarter and sequentially. Lower input costs, operating leverage are key margin tailwinds while falling revenue share of CVs (sequentially) and rise in variable marketing spends at JLR are key margin headwinds.

The company’s consolidated Profit After Tax or PAT could surge 195% over the year-ago quarter and 37% sequentially, believe analysts at IIFL Capital Services.

Important management insights to watch out for:

• Demand trends across segments, markets
• Outlook on pricing, margins

₹ Million	December 2023 estimates	YoY change	QoQ change
Revenue	1,091,974	23.4%	3.9%
EBITDA	150,581	56.2%	9.7%
EBITDA margin	13.8%	289 bps	74 bps
Profit After Tax	52,501	194.8%	36.6%

Source: IIFL Research