Tata Motors Q1 Preview: Analysts estimate up to Rs 2,000 cr loss

Here's what leading brokerages expect from the automaker's Q1 results

Tata Motors Q1 Preview: Subdued sales in the June quarter, coupled with rising commodity cost pressures, could result in a net loss of up to Rs 2,010 crore for Tata Motors in Q1FY22, fear analysts. Moreover, adverse currency movement, weaker sequential realisations, and lower scale may also dent the automaker’s profit margins in the quarter under review, they say. The company is slated to report its Q1FY22 results on Monday, July 26.

“Tata Motors is expected to report muted Q1FY22 results tracking sequential weakness in volumes across India passenger vehicles (PV), India commercial vehicle (CV) and Jaguar Land Rover (JLR) operations along with associated perils of negative operating leverage and higher raw material costs,” noted analysts at ICICI Securities.

Here’s what to expect:

Nomura

It expects TaMo’s consolidated (adjusted) net loss to stand at Rs 1,558.6 crore in Q1FY22 relative to a net loss (attributable to shareholders of the company) of Rs 8,438 crore reported in the year ago period and of Rs 7,605 crore incurred in Q4FY21 (March quarter of the previous fiscal).

Individually, Tata Motor’s standalone net loss is pegged at Rs 987 crore while JLR’s net loss is seen at GBP 5.6. 

The consolidated revenue, meanwhile, is seen rising 103 per cent YoY to Rs 64,779 crore from Rs 31,983 crore clocked in Q1FY21. Sequentially, it would be a drop of 27 per cent from Rs 88,628 crore.

Emkay Global

The brokerage pegs net loss and revenue from operations at Rs 2,009.7 crore and Rs 62,626 crore, respectively. Operationally, Ebitda is seen soaring 772 per cent YoY but down 57 per cent QoQ at Rs 5,539.2 crore.

“On a QoQ basis, realizations should decrease by 6 per cent due to adverse mix (lower share of MHCV). Besides, Ebitda margin should contract to 8.7 per cent from 14.4 per cent sequentially. Margin contraction of nearly 570bps QoQ is likely due to commodity inflation and lower scale,” it observed in its earnings preview report.

KRChoksey

Tata Motors Q1 volume sales was up by 358 per cent YoY and down by 40 per cent QoQ. During the quarter, the CV segment witnessed growth on the back of improved consumer sentiments, and higher infrastructure demand while the PV business witnessed strong growth on a low base with robust demand for personal mobility and new launches driving demand. 

Given this, the brokerage expects revenue to grow at 74 per cent YoY and -37 per cent QoQ at Rs 55,702.5 crore, while Ebitda margins could be around 11 per cent and PAT margins around 2.8 per cent.

Moreover, it pegs net loss at Rs 1,531.8 crore and Ebitda at Rs 6,127.3 crore.

It would track the management’s commentary on demand environment across segments (PV/CV) in both, domestic and overseas, market; cues on average prices; traction for new product launches; inventory channel status; forex impact; and impact on margin.

ICICI Direct

JLR wholesale volumes (including China JV) are expected to decline 35.3 per cent QoQ to 88,324 units while India CV and PV segments posted sequential decline of 52.9 per cent QoQ (to 50,145 units) and 24.4 per cent QoQ (to 64,441 units), respectively. 

Thus, consolidated operating income could decline 36.1 per cent QoQ to Rs 56,672 crore. Moreover, consolidated Ebitda margins are seen declining by 420 bps QoQ to 12.3 per cent with JLR margins seen declining by 480 bps QoQ to 10.5 per cent. Overall, it expects consolidated loss of Rs 1,663 crore in Q1FY22.