Tata Motors is expected to show a smart recovery for Q3FY22 in sequence by relieving semiconductor concerns and strong volume growth, despite years of year-on-year (yoy) it is likely to be weak.
Carmakers will announce their financial results for the quarter ended December 31, 2021 at this time.
Analysts mostly expect the company to post more than RS 2,200 Crore for the quarter ended December 2021 because the problem of lack of chip hit the Jaguar Land Rover business, against the profit of RS 2,906.5 Crore in the fiscal period and the last loss in September. 2021 quarter.
Revenue on the basis of consolidation is likely to fall into one digit but sequentially can see the growth of two digits with recovery on the volume, while operating income can significantly fall YoY, but it can sequentially grow in two digits for the December quarter of 2021.
Tata Motors have gained 49 percent since the beginning of October 2021, outperformed sharply not only nifty50 (which fell 3 percent) but also an automatic nifty index (which rose 8.4 percent), thanks to increasing demand for commercial vehicle segments and semiconductor crisis easing for JLR .
“We hope that the income of JLR (former JV China) will decrease by 25 percent yoy in Q3FY22,” said the institutional equity of the box.
Brokers expect EBITDA margins to increase by 210 BPS QOQ to 9.4 percent due to the benefits of leverage operations and mitigation measures. “As a result, we hope the EBIT JLR margin comes to a negative 1.2 percent in Q3FY22.”
Overall Retail Volume JLR declined 37.6 percent yoy and 13.6 percent QoQ to 80,126 units in the October-December quarter.
Jaguar Land Rover on January 12 said his retail sales for a period of three months until December 31, 2021 continued to be limited by the lack of global semiconductors, even though the company began to see some improvements in chip supplies and wholesale volume compared to before. quarter.
“The fundamental demand for Jaguar Land Rover products remains strong and the company has proactively manage the supply of semiconductors to maximize the production of higher margins,” he added.
In sequence, Prabhudas Lilladher said JLR’s income could grow 16 percent because the volume is expected to improve with semiconductor problems gradually subside. “Margin is expected at 9.7 percent versus 7.3 percent of Qoq.”
With an independent basis, most of which are domestic businesses, both brokers (Boxes and Prabhudas Lilladher) expecting to grow income by 18 percent of Qoq due to strong volume growth (15 percent). A 3 percent sequential increase in the average selling price also tends to support the topline.
Overall, “We hope that the EBITDA margin has increased to 4.1 percent in Q3FY22 from 2.2 percent in Q2FY22 led by (1) the benefits of operating leverage and (2) mitigation costs, are partly offset by headwinds of raw materials,” the box said.
Prabhudas Lilladher remains positive at Tata Motors given (1) firm attitude in electric vehicle ecosystems, (2) business passenger vehicles with SUV focus approaches and new product pipes are set to get market share and (3) Commercial vehicles that are profitable from the progress cycle.