Tata Motors will report its December quarter earnings on January 29 and brokerages expect a year-on-year (YoY) rise in revenue and a decline in the reported loss.
Along with the numbers, investors will focus on the company's India business outlook, including market share gains in the passenger vehicle (PV) segment, recovery trends in the commercial vehicle (CV) and JLR segments and the impact of Brexit on JLR manufacturing.
The company is expected to show a YoY rise in revenue, profit and EBITDA margin front owing to cost-cutting measures along with an increase in average selling prices (ASPs).
Brokerage firm Kotak Institutional Equities expects Tata Motors' standalone revenues to go up by 27 percent YoY led by a 22 percent increase in volumes across segments and a 3 percent increase in ASPs on account of a price hike due to BS-VI transition, which may have been partly offset by a higher mix of PV segment in Q3FY21.
Kotak's estimates show Tata Motors' standalone EBITDA margin may come at 4.8 percent, up 530 bps YoY, led by operating leverage benefits and cost-cutting initiatives in Q3FY21.
However, the JLR segment may continue to show some signs of stress due to a fall in volume in Q3.
Kotak expects JLR volumes to decline by 1 percent YoY (including China JV) and 8 percent YoY (excluding China JV) in Q3FY21.
For the JLR segment, Kotak expects revenues (excluding China JV) to increase by 11 percent YoY after an 8 percent YoY decline in volumes and a 20 percent YoY increase in ASPs in Q3FY21. Reported EBITDA margin may increase by 520 bps YoY to 15.7 percent due to cost-cutting initiatives.
HDFC Securities expects Tata Motors' standalone volumes to grow by 22 percent YoY and standalone revenues by 31 percent.
EBITDA margin may rise 370 bps YoY to 5.1 percent. The company may report a loss of Rs 620 crore against a loss of Rs 1,040 crore YoY.
For JLR, HDFC expects an EBITDA margin of 11 percent against 10.8 percent YoY.
Brokerage firm Antique Stock Broking expects Tata Motors' consolidated EBITDA margin at 12.2 percent, up 170 bps YoY, led by cost-saving initiatives in JLR business and margin improvement in the domestic PV business.
Antique's estimates show a 15 percent YoY rise in consolidated sales, a 34 percent YoY gain in consolidated EBITDA and a 47.7 percent jump in consolidated net profit.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.