Tata Motors Q1 Preview: JLR, Indian CV sales may fuel revenue growth

Tata Motors Q1 preview: Automobile major Tata Motors (TaMo) is scheduled to release its financial results for the June quarter of the fiscal year 2025 (Q1FY25) on Thursday, August 1, 2024.

Analysts anticipate a strong year-over-year (Y-o-Y) revenue growth, driven by increased volumes from Jaguar Land Rover (JLR) and higher sales in Indian commercial vehicles (CVs).

Meanwhile, on the bourses, Tata Motors shares price hit a new high of Rs 1,179.05 on Tuesday, July 30, 2024. The stock surged about 5 per cent intraday, continuing its upward trend from the past four days, buoyed by expectations of robust operational performance.

In the past week alone, Tata Motors' stock has climbed 18 per cent following an upgrade from brokerage firm Nomura, which set a 'Buy' rating and a target price of Rs 1,294 per share. READ MORE

Here’s what top brokerages are forecasting for TaMo in Q1FY25:

Nuvama Institutional Equities 

Nuvama projects that Tata Motors will see strong revenue growth in Q1FY25, supported by improvements in both JLR and Indian CV segments. 

The brokerage expects revenue to reach Rs 1,06,941.8 crore, up 5 per cent Y-o-Y, with Ebitda at Rs 14,677.9 crore, reflecting an 8 per cent Y-o-Y increase. PAT is forecasted at Rs 5,138 crore, a 22 per cent Y-o-Y rise. 

Key aspects to watch, analysts said, will be the demand outlook for JLR and Indian CVs.

Motilal Oswal 

Motilal Oswal notes a mixed performance in the Indian market, with CV volumes up 6 per cent Y-o-Y but passenger vehicle (PV) volumes down 1 per cent Y-o-Y. 

The brokerage expects CV/PV Ebit margins to contract by 190 bps and 50 bps Q-o-Q, respectively, due to lower volumes. JLR volumes are anticipated to grow by 3 per cent Y-o-Y, with an expected Ebit margin of 7.5 per cent, down 170 bps Q-o-Q due to an unfavorable product mix and rising expenses. 

Thus, consolidated revenue is forecasted at Rs 1,03,360 crore, up 1.1 per cent Y-o-Y, with Ebitda at Rs 13,760 crore, reflecting a 13.3 per cent Y-o-Y increase. The Ebitda margin is expected to be 13.3 per cent, with PAT at Rs 4,030 crore.

Emkay

Analysts at Emkay expect revenue growth driven by a 5 per cent increase in JLR volumes and a 2 per cent increase in Indian CV sales. However, consolidated Ebitda margins are likely to decline Q-o-Q due to a lower scale in JLR and standalone operations. 

Considering these aspects, the revenue forecast stands at Rs 1,08,073 crore, up 2 per cent Y-o-Y, with Ebitda at Rs 14,481.8 crore, a 6.8 per cent Y-o-Y increase. The Ebitda margin is expected to be 13.4 per cent, and PAT is estimated at Rs 4,740.2 crore, up 12.3 per cent Y-o-Y.

Kotak Institutional Equities 

Those at Kotak Institutional Equities anticipate a 9 per cent Y-o-Y increase in standalone revenue, driven by a 6 per cent increase in volumes and a 2-3 per cent rise in average selling prices (ASPs) due to price hikes. 

The brokerage expects the Ebitda margin to improve by 160 bps Y-o-Y to 10 per cent due to operating leverage and a richer product mix. However, domestic PV business Ebitda may decline to 6.8 per cent (-50 bps Q-o-Q) due to negative operating leverage and higher discounts, partly offset by lower battery prices in the EV segment. 

Meanwhile, JLR volumes (excluding the China JV) are expected to increase by 9 per cent Y-o-Y, with major growth in Range Rover, Range Rover Sport, and Defender models. 

Therefore, the revenue forecast is Rs 1,18,171 crore, up 15.6 per cent Y-o-Y, with Ebitda at Rs 15,567.5 crore, up 14.8 per cent Y-o-Y. Adjusted PAT is expected to be Rs 6,018.2 crore, a 41.5 per cent Y-o-Y increase, with an Ebitda margin of 13.2 per cent.