Tata Motors Q3 Results Review - Healthy JLR Performance To Cushion Weak Standalone: Yes Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Yes Securities Report.Tata Motors Lts Q3 FY24 consolidated results were operationally in-line to our estimates while it exceeded street estimates with Ebitda beat of ~10.9% at Rs 153.3 billion (plus 59% YoY/ plus 11.7% QoQ).However, higher other income and lower tax (at Jaguar Land Rover) boosted adjusted profit after tax at Rs 73.6 billion (versus our/street of Rs 44.4 billion/Rs 47.1 billion). With healthy underlying profitability, the margins came-in health with consol Ebitdam at 13.9% (plus 300 basis points YoY/ plus 80 bp QoQ). There were several line items which were positive such as-Net auto debt decline further to ~Rs 292 billion (versus ~Rs 387 billion in Q2 and Rs 437 billion in FY23) led by healthy free cash flow both at JLR/domestic business,margins for ICE private vehicle at 9.4% (versus 9.2%/8.5% in Q2/FY23) with guidance of double digit Ebitda intact,upward revision in JLR Ebit guidance to greater then 8% for FY24E (versus ~8%/6% in Q2/Q1 with no change to FY26 Ebit margins guidance of double digit.While JLR demand commentaries continue to be positive for North America and stable for Europe, there would be some disruptions led by red sea impact..We like Tata Motors given it’s improving India franchise, early leadership in electric vehicle in India, and JLR’s improved profitability. Standalone business is in mid-upcycle both in private vehicle and commercial vehicle whereas favorable product cycle to help drive JLR outperformance.We cut FY25E consolidated earning per share by ~10% as we cut commercial vehicle volumes for the domestic business while raise FY26 consolidated earning per share by ~9% to factor in for better margins at JLR and fast deleveraging.We estimate revenue/Ebitda/Adjusted profit after tax compound annual growth rate of 10%/12%/27% in FY24-26E and maintain 'Buy' with SoTP based target price of Rs 1,060 (versus Rs789 earlier).We raise JLR multiple to three times (versus two times earlier) to factor in for healthy profitability..Click on the attachment to read the full report:.Bank Of India Shares Plunge Over 8% After Q3 Profit Misses Estimates.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Tata Motors Q3 Results Review - Healthy JLR Performance To Cushion Weak Standalone: Yes Securities

Underlying profitability continues to be better.

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Tata Motors Q3 Results Review - Healthy JLR Performance To Cushion Weak Standalone: Yes Securities

Underlying profitability continues to be better.

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