Tata Motors Q2 Results Review - Near Term Challenges, Strong Recovery At JLR In FY24E: Reliance Securities

Reliance Securities Report

Tata Motors Ltd. has recorded subdued performance with Ebitda margin coming in at 7.8% versus our estimate of 8.5% in Q2 FY23. Consolidated revenue grew by 30% YoY (up 11% QoQ) to Rs 796 billion, versus our estimate of Rs 779 billion, better than expected due to better realisation at Jaguar Land Rover.

Consolidated Ebitda grew by 53% YoY (up 95% QoQ) to Rs 61.9 billion, versus our estimate of Rs 66.2 billion due to lower margins at India operations due to higher raw material cost, despite JLR margins coming healthy.

Ebitda margin expanded by 118 bps YoY and 336 bps QoQ to 7.8%, versus our estimate of 8.5%.

JLR’s Ebitda margin of 10.3% (up 300 bps YoY and up 397 bps QoQ) was 220 bps higher than our estimates of 8.1% due to strong product mix, lower discounts and higher average realisation.

Tata Motors reported a net loss of Rs 9.4 billion and adjusted net loss of Rs 6.3 billion (adjusted for exceptional expenses of Rs 3.1 billion), supported by higher non-operating income and tax credit versus our estimated net loss of Rs 10.8 billion.

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