Tata Motors reported a consolidated net loss of Rs 1,516 crore for the quarter ended December against a net profit of Rs 2,906.5 crore in the year-ago period
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Tata Motors share price slipped more than 3 percent in the early trade on February 1, a day after the company reported a consolidated net loss of Rs 1,516 crore for the quarter ended December against a net profit of Rs 2,906.5 crore in the year-ago period
Tata Motors on January 31 said its consolidated revenues for the reported quarter declined 4.5 percent year-on-year to Rs 72,229 crore.
In the previous quarter, the Jaguar Land Rover maker had reported a consolidated net loss of Rs 4,441.6 crore.
The fourth consecutive quarter of consolidated net loss reported by the company underlines the damage caused by the shortage of semiconductors faced by the global automobile industry.
Overall, the company posted a consolidated operating profit of Rs 7,400 crore and a 460 basis point contraction in the margin to 10.2 percent.
The company is soon to announce its monthly sales numbers for January 2022.
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Here is what brokerages have to say about the stock and the company after the December quarter earnings:
Jefferies
The research house has maintained the “buy” call on the stock, with the target at Rs 635 a share.
JLR has delivered its highest gross-profit-per-vehicle in a decade led by better mix and see better times for JLR ahead as chip constraints ease.
India business should improve led by demand revival, strong personal vehicle (PV) portfolio and margin recovery, Jefferies said.
In the previous trading session, Tata Motors closed at Rs 517.50, up Rs 20.10, or 4.04 percent, on the BSE.
Prabhudas Lilladher
Tata Motors’ consolidated performance surprised positively with EBITDA margin at 12.5 percent (+250bps QoQ). Chip supply issue at JLR seems to be easing out as production grew 41 percent QoQ and is expected to gradually improve over 2022.
We maintain our positive stance on Tata Motors and reiterate as our top pick given (1) PV business is likely to gain further market share, led by new product launches and expanding portfolio. (2) Commercial vehicle (CV) volumes will benefit from cyclical upturn, improving fleet utilisation and freight rates (3) new refreshes in Land Rover and strong order book to benefit JLR and drive FCF generation.
We change our estimates by -2/+9 percent for FY23/24 to factor in the chip-supply scenario. Maintain “buy” with a revised SOTP based Dec-23 target price of Rs 632 at 11.5x EV/EBITDA for standalone operations, 2.5x EV/EBITDA for JLR.
Sharekhan
Tata Motors is witnessing an improvement in all business verticals—JLR, CVs and PVs. H2FY21 saw strong volume growth and better operational efficiencies aided by aggressive launches, market positioning, product differentiation, cost savings and investments in R&D.
We expect operational performance to improve strongly in Q4FY22, as the supply constraints are expected to ease gradually, while demand continues to remain strong for both JLR and domestic operations. Domestic CV and PV segments are expected to remain healthy on back of new launches.
Driven by an all-around strong performance, we expect company to become earnings’ positive in FY2023E with a PAT of Rs 11,708 crore, driven by a 16.7 percent revenue CAGR during FY2021E-FY2023E and a 120 bps improvement in EBITDA margin to 13.4 percent in FY23E from 12.2 percent in FY21.
We reiterate a “buy” rating on the stock with unchanged price target of Rs 610.
At 9.23 am, Tata Motors was quoting at Rs 503.45, down Rs 14.05, or 2.71 percent, on the BSE.
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