Tata Motors will announce its September quarter earnings on October 27 and the company is expected to show subdued numbers as the industry faces challenges exacerbated by the coronavirus outbreak.
India's business outlook, market share gains in the passenger vehicle (PV) segment, recovery trends in the commercial vehicle (CV) segment and recovery trends for JLR will be the key monitorable.
As per Kotak Institutional Equities' estimates, Tata Motor's standalone revenues may increase by 18 percent year-on-year (YoY), led by (1) 5 percent YoY increase in volumes across segments to 110.4k units and (2) 13 percent YoY increase in ASPs due to price increase due to BSVI transition in Q2FY21.
"We build in a standalone EBITDA margin of 0.9 percent (Up 470 bps YoY), led by (1) operating leverage benefits and (2) cost-cutting initiatives in Q2FY21," Kotak sid.
It, however, expects JLR volumes to decline by 17 percent YoY to 100.9k units in Q2FY21. It expects revenues to decline by 11 percent YoY, led by (1) 17 percent YoY decline in volumes and (2) 7 percent YoY increase in ASPs in Q2FY21.
Overall, net sales of Tata Motors may inch up 1.1 percent YoY and EBITDA margin may fall 194 bps YoY, Kotak said.
The company's adjusted PAT may come at Rs -9,244 crore in Q2FY21 against Rs -84,884 crore in Q1FY21 and Rs -1,474 crore in Q2FY20, said Kotak Institutional Equities.
Brokerage Motilal Oswal expects Tata Motor's Q2FY21 adjusted PAT at Rs -39,979. EBITDA margins may come at 5.1 percent.
Motilal is of the view that Tata Motors' India business may report a loss due to subdued CV demand. India business will have an adverse mix (CV contribution at nearly 56 percent to revenues against 78 percent YoY), Motilal said.
Brokerage firm HDFC Securities expects Tata Motors' standalone volumes to grow by 5 percent YoY while standalone revenues may grow by nearly 9 percent YoY to Rs 10,800 crore against Rs 2,700 crore QoQ.
HDFC Securities expects an EBITDA margin at 1.5 percent against a loss YoY as well as QoQ. "We expect a loss of Rs 1,100 crore against a loss of Rs 2,100 crore and Rs 1,300 crore QoQ and YoY, respectively," HDFC Securities said.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.