Recommendation: buy
Target Price: Rs580
Tata Motors’ consolidated revenue for the March 2022 quarter is expected to fall 11.4% from the prior year quarter amid weak JLR volumes. Autonomous revenue, however, could rise 32% from the prior year quarter, fueled by a strong 27% increase in volumes.
The company’s profitability is expected to remain weak for both JLR and the domestic business. Margins are likely to be affected by the weak product mix, increased expenses related to the launch of new models and rising input costs. Price increases and improved operating leverage could provide some support for margins.
The company could post a net loss for stand-alone and consolidated businesses. Autonomous losses could, however, be reduced sequentially.
Important management information to monitor:
Demand outlook across all segments and markets
Profitability improvement plan
AUTONOMOUS
|
million rupees |
March 2022 estimates |
Annual change |
QoQ change |
| Revenue | 264,781 | 32.1% | 26.3% |
| EBITDA | 13,862 | 0.1% | 109.2% |
| EBITDA margin | 5.2% | (167) basis points | 207 basis points |
| Profit after taxes | (972) | (180.1)% | NM |
Source: IIFL Research
CONSOLIDATED
|
million rupees |
March 2022 estimates |
Annual change |
QoQ change |
| Revenue | 784,930 | (11.4)% | 8.7% |
| EBITDA | 64,816 | (49.1)% | (4.2)% |
| EBITDA margin | 8.3% | (612) basis points | (111) basis points |
| Profit after taxes | (12,134) | (123.7)% | NM |
Source: IIFL Research
