Tata Motors Q1 cons net likely flat; revenue seen up 6%

Moneycontrol Bureau

India's largest commercial vehicle maker Tata Motors will report its first quarter earnings later on Wednesday. The company, which also owns the British luxury Jaguar and Land Rover brands, will continue to report a loss in its standalone operations, amid a slump in CV demand and slow passenger vehicle sales. However, that is likely to be offset by Jaguar Land Rover, where stronger product pricing and margins should help. Analysts on average expect Tata Motors to report a consolidated net profit of Rs 2,250 crore, almost flat year-on-year, while revenue is seen up 6 percent to Rs 45,700 crore in the April-June quarter, according to a CNBC-TV18 poll. It must be noted that analysts expectations on the company's consolidated profit vary sharply. Brokerage Anand Rathi, for instance, expects the company's net profit to decline 9.4 percent, while Emkay Global Financial Services sees profit falling as much as 21 percent. Meanwhile, Tata Motors' consolidated Q1 EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to rise 9 percent to Rs 6,282 crore, while operating profit margin is seen expanding to 13.9 percent from 13.2 percent, according to the CNBC-TV18 poll. "In Q1, we expect Tata Motors' consolidated profits to register 9.4 percent year-on-year decline; while JLR's good performance continues, the  Indian operations are expected to continue to be a drag due to the slump in CV sales and lower passenger vehicle sales," says Rohan korde of Anand Rathi Shares. The company's volumes in the domestic market declined 19 percent year-on-year to 1.53 lakh units, last quarter, while JLR's global volumes rose 9 percent to 90,556 vehicles. Expect JLR's Q1 profit to rise 22 percent and revenue to rise 8 percent. Margin will be close to 15.4 percent, up from 14.5 percent in the year ago quarter. "Our product mix calculations imply an ASP increase of 2-4 percent (QoQ and YoY) for JLR during this quarter (versus 1.5 percent YoY decline during FY13). This is mainly driven by positive mix impact from new Range Rover, F-Type and all-wheel drive Jaguars, partially offset by negative mix impact from smaller engine Jaguars and weaker sales in older Range Rover Sport," say Goldman Sachs analysts Sandeep Pandya and Sumeet Jain. On the other hand, expect standalone business to report a loss of Rs 400 crore, versus a Rs 205 profit, a year ago. Revenue is also seen down 18 percent to Rs 8,600 crore. Its operating profit margin is likely to shrink to 2.2 percent from 6.6 percent. Tata Motors shares were down 4 percent at Rs 276.20 on NSE in morning trade. Also Read: Ashok Leyland to cut FY14 investments to Rs 400 crore