What to expect from Tata Motors in Q1

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26 Aug, 2025 12:21

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Country's largest commercial vehicle maker Tata Motors is set to announce its results for the quarter ended June 2012 today. Analysts on an average expect the consolidated profit after tax to grow by 28.5% year-on-year to Rs 2,570 crore. In a year ago period, the company's reported PAT had included a forex loss of Rs 57 crore.

Revenues are seen going up by 27% to Rs 42,500 crore from Rs 33,572 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to go up by 30% to Rs 5,500 crore from Rs 4,235 crore during the same period.

But operating profit margin is likely to increase just 23 basis points YoY to 12.83% in the first quarter of financial year 2012-13.

Its subsidiary Jaguar and Land Rover's (JLR) profit after tax is expected to grow by 22.3% YoY to GBP 268 million and revenues are seen going up by 29.63% YoY to GBP 3.5 billion. Analysts expect EBITDA to rise by 22.5% to GBP 500 million, but operating profit margin to fall by 90 basis points to 14.2% during the same period.

However, Tata Motors is likely to disappoint the street by standalone performance, which means the growth on consolidation basis will be majorly supported by JLR. Revenues are likely to go down by 12.5% to Rs 10,420 crore and EBITDA is seen falling by 35% to Rs 623 crore year-on-year.

Operating profit margin is expected to decline by 210 basis points YoY to 6% and profit after tax is seen falling sharply to Rs 33 crore from Rs 401 crore during the same period.

Some analysts feel the commercial vehicle major may report a loss in standalone business due to operating profit decline and forex loss.

Investors should watch out for JLR margins this quarter. In the previous quarter (Q4FY12), margin fell by 540 basis points QoQ to 14.6%. So analysts expect the margin to weaken further sequentially due to increase in discounts in the US markets, product mix pressures and high product development charges.

Consolidation operating profit margin is likely to decline QoQ due to: a) lower margins in the JLR business driven by weaker mix and lower operating leverage; and b) a decline in standalone margins on weak MHCV volumes.

Volume growth in Q1FY13

There was a big fall in volumes of medium and heavy commercial vehicles and passenger vehicles, but JLR's volumes remained robust.