Tata Motors's first quarter consolidated net profit (excluding forex gains) may plunge 42 percent year-on-year to Rs 3,100 crore as Jaguar Land Rover, which has supported the consolidated bottomline during slowdown in commercial vehicle space, may hurt June quarter earnings. The company will announce its earnings on August 7.
Revenue is expected to fall by 2.5 percent to Rs 63,068 crore compared to Rs 64,683 crore in the year-ago period, according to average of estimates of analysts polled by CNBC-TV18.
In fact, the stock, too, lost 21 percent in 2015 as it has completely de-rated (by brokerages) in June quarter due to slowdown in China's luxury car market, which accounts for 20 percent of JLR sales. However, its standalone business has seen substantial improvement in past few months due to recovery in passenger vehicle (PV) and medium & heavy commercial vehicle (MHCV) business.
Consolidated operating profit (earnings before interest, tax, depreciation and amortisation) may slip 15.4 percent year-on-year to Rs 9,424 crore and margin may contract by 230 basis points to 14.9 percent during the quarter.
Jaguar Land Rover
JLR's profit after tax may tank 57 percent to pound 393 million on weak operational performance and revenue is seen falling 3.6 percent to pound 5,160 million on lower volume growth year-on-year. Operating profit may drop 21 percent to pound 863 million and margin may shrink by 360 basis points to 16.7 percent during the same period (sequentially margin may fall 70 basis points).
Weakness in China luxury market and no traction in locally produced Evoque hit sales volumes during the quarter. JLR sold 1.14 lakh units in Q1, down 0.6 percent year-on-year and 8.5 percent quarter-on-quarter.
Jaguar sales volumes increased by 8 percent Y-o-Y (up 5.5 percent sequentially) while Land Rover volumes slipped 2.4 percent Y-o-Y (down 11 percent Q-o-Q) due to slower ramp up of locally made Evoque at Chery JV in China.
Barring Evoque, all other models like Discovery Sport, Defender and RR continued to do well in June quarter.
Analysts expect forex gain during the quarter as pound has appreciated against dollar on sequential basis.
Standalone (domestic business)
Tata Motors is expected to report profit of Rs 180 crore in Q1 against Rs 394 crore in the corresponding quarter of last fiscal. In Q1FY15, other income of Rs 1,597 crore on annual dividend from JLR led the bottomline growth.
Revenue may increase 19 percent on yearly basis to Rs 9,193 crore and operating profit is expected to be Rs 150 crore against loss Rs 298 crore year-on-year.
Standalone business has seen an improvement Q4FY15 onwards due to recovery in PV and MHCV segments. In Q1, company sold 1.16 lakh units, higher by 5.9 percent compared to 1.10 lakh units sold in same quarter last fiscal. Passenger vehicle business saw good resurgence on new launches - Zest, Bolt and Gen X Nano.
PV sales volumes increased by 28.7 percent Y-o-Y to 31,649 units and MHCV volumes jumped 19 percent Y-o-Y to 32,417 units. However, light commercial vehicle (LCV) volumes (Tata ACE) continued to be under pressure with sales degrowth of 24.9 percent at 36,013 units.
In Q4, Tata Motors made profit at EBITDA level in standalone business, which could continue in June quarter as well.
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