What to expect from Tata Motors' Q4 earnings

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26 Aug, 2025 12:21

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Moneycontrol Bureau 

Sales of automobiles, especially passenger cars, have had a rocky road over the last one year, with a sharp rise in petrol prices and expensive loans denting demand. However, Tata Motors, which makes cars like the Indica Vista, Manza and Nano, has seen accelerated growth in its UK-based luxury Jaguar and Land Rover division. The company will report fourth quarter and full year earnings on Tuesday. 

Tata Motors is India's largest commercial vehicle maker, a segment which too has been a mixed bag last financial year. Light trucks like Tata Motors' Ace, Mahindra's Maxximo and Ashok Leyland's Dost, saw brisk sales. However, heavy commercial vehicles hit speed bumps due to the overall economic and industrial slowdown. 

The Tata Group company sold sold 9.07 lakh units last year, a 13% growth year-on-year. Its CV sales were highest ever in a year at 5.30 lakh units, driven by 27% growth in LCV sales. Medium and Heavy Commercial Vehicle sales rose much slower at 8%. 

In its passenger vehicle division, full year sales (including FIat sales in India) were up just 3% at 3.30 lakh units. However, over at JLR, sales surged 51% year-on-year to 36,471 units, helped by strong demand in markets like China and brisk sales of its newly launched Evoque SUV. 

Analysts expect Tata Motors will report a net profit growth of 50-55% year-on-year in Jan-March, while sales are likely to have risen 40-42%. On a sequential basis, net profit is seen up 5-20%, with a revenue growth of 10-12%. 

The company's margins are seen expanding 170-200 basis points compared to the year-ago quarter. 

"We expect strong improvement in year-on-year margins at JLR on the back of strong volumes and favourable exchange rate and regional mix (higher share from Chinese markets," says Ashvin Shetty, analyst at Ambit Capital. 

Chirag Shah of Emkay Global says JLR's EBITDA (earnings before interest, taxes, depreciation and amortization) margins may have expanded as much as 430 bps YoY and 40 bps quarter-on-quarter. However, standalone business performance will remain lackluster due to impact of adverse product mix on margins (lower share of more profitable CVs), he says. 

KEY THINGS TO WATCH: 

- Sales in the domestic market and JLR's sales, especially in markets like China, where demand for luxury PVs has been robust.

- Outlook on M&HCVs and PVs in the domestic market. Society of Indian Automobile Manufacturers (SIAM) has forecast 10-12% growth for passenger cars this year.

- Commentary on raw material prices.

- Impact of currency swings. 

Tata Motors shares have jumped 50% since December-end, compared with the wider Nifty index, which has gained 6% over the same period. On Monday, the stock was trading at Rs 274.60, up 2.1% in afternoon trade on NSE.