Q4FY23 Preview: Tata Motors: Revenue seen at Rs. 1,061,960 million, PAT at Rs. 44,619 million

10 May 2023 , 10:11 AM

Result date: 12^th May, 2023

Recommendation: Buy

Target price: Rs. 540

Tata Motors is likely to put up a robust performance in the March 2023 quarter. Analysts at IIFL Capital Services expect its consolidated revenues to grow 35% over the year ago quarter and 20% sequentially. JLR volumes (ex-China JV) grew 24% over the year-ago quarter and 19% sequentially. Product mix stood strong with share of “RR + RR Sport and Defender” flattish sequentially at 64%. The company’s standalone volumes grew 3% over the year-ago quarter and 10% sequentially.

Operating leverage and lower discounts in trucks are key margin tailwinds while fall in China’s share sequentially, from 14.6% to 12.7% is a prominent margin headwind. Tata Motors’ consolidated EBITDA margin could grow 174 basis points over the year-ago quarter and 199 basis points sequentially.

The company’s consolidated Profit After Tax (PAT) could jump significantly during the quarter, partly due to a low base and partly reflecting the strength witnessed in revenue and margins.

Important management insights to watch out for:

• Demand trends across markets, product segments
• Outlook on input cost inflation, pricing action, margins

	March 2023 estimates	YoY change	QoQ change
Revenue (Rs. Million)	1,061,960	35.4%	20.0%
EBITDA (Rs. Million)	136,872	56.6%	41.9%
EBITDA Margin (%)	12.9%	174 bps	199 bps
Profit After Tax (Rs. Million)	44,619	3092.7%	150.5%

Source: IIFL Research