Tata Motors Limited is expected to report a small consolidated net profit for the quarter ended March as the company continues to face challenges on the production and raw materials front.
The Jaguar Land Rover owner is expected to report a consolidated net profit of Rs 12.8 crore for the reporting quarter as against a consolidated net loss of Rs 7,605 crore a year ago, according to a poll of four brokerages by Moneycontrol.
The brokerages were divided on the bottomline performance of the company as ICICI Securities and YES Securities expect the automaker to report net loss of Rs 1,000 crore and Rs 427 crore, respectively.
The company will report its March quarter earnings on May 12.
Tata Motors and its subsidiary Jaguar Land Rover have been marred by limited supply of semi-conductors, which has sharply shrunk the company’s production capacity despite indicating overall strong demand environment.
The challenges on the production front will likely result in the company’s consolidated revenue from operations falling 7 percent on-year to Rs 82,386 crore in the reporting quarter, the Moneycontrol poll showed.
That said, the weakness in the topline of Tata Motors will largely be driven by Jaguar Land Rover. The subsidiary’s volumes in the quarter are expected to decline 38 percent on-year due to the ongoing chip crisis.
The India business, however, will display strong performance as volumes rose 27 percent on-year, driven by the passenger cars and commercial vehicle business. Tata Motors has managed to gain market share in the domestic car market at the expense of market leader Maruti Suzuki due to success of several sports utility vehicles launched by the company in recent years.
Brokerage firm Kotak Institutional Equities expects India revenues to rise 23 percent on a sequential basis aided by higher volumes and increase in average selling price.
On the operating front, Tata Motors’ consolidated operating profit is expected to slump 36 percent on-year to Rs 8,159 crore in the reported quarter largely because of weak performance of JLR and rising commodity prices.ICICI Securities believes JLR will report a 50 percent on-year decline in operating profit to 500 million pound sterling. Overall, Tata Motors consolidated operating margin will shrink 250-410 basis points on-year in the reporting quarter to 10.3-11.9 percent.
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