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Here's what brokerages expect from Tata Motors' Q4FY21 results on Tuesday

Auto major Tata Motors is scheduled to release its March quarter results on Tuesday. Analysts expect the company to report a strong standalone performance, offset by modest performance in JLR. On a consolidated basis, they are penciling in a 41 per cent year-on-year (YoY) increase in the company's top-line and a profit of up to Rs 2,813 crore. 

In comparison, Tata Motors had reported revenue of Rs 62,493 crore and loss of 5,411.2 crore, respectively, in the year-ago quarter.

According to HDFC Securities, progress on the EV platforms, especially in  terms of hybrids, impact of lockdown on the near term on volumes, and impact of scrappage scheme on commercial vehicles (CVs) will be the key things to track.

As per the monthly sales data for April, Tata Motors sold 1.91 lakh units, up 89 per cent on a year-on-year (YoY) basis, while sequentially, volumes grew 21 per cent. In Q4FY21, the company sold 83,857 passenger vehicles (PV), and 98,967 commercial vehicles in the domestic market. It also exported 8,896 units.

Meanwhile, Jaguar Land Rover achieved retail sales of 1.23 lakh vehicles in Q4FY21, 12.4 per cent higher than the same quarter last year.

At the bourses, shares of Tata Motors surged 64.3 per cent during the March quarter as compared to 3.68 per cent gain in the S&P BSE Sensex, ACE Equity data show.

Here's a look at what the leading brokerages expect from Tata Motors' March quarter numbers.

Nomura

For standalone, the brokerage is forecasting around 96 per cent YoY revenue growth, driven by around 89 per cent growth in overall volumes, price hikes, and better mix. Ebitda margins should improve 100 bps QoQ to 6.8 per cent on operating leverage benefit and cost control, partially offset by higher commodity prices, it said.

For JLR, revenue is seen growing around 21 per cent YoY. "However, realizations should decline 7 per cent QoQ on weaker product and geography mix. This should lead to a 90 bps QoQ decline in its adjusted Ebitda margin to 13.5 per cent despite operating leverage benefit sequentially. We estimate another 1.5 billion pounds of restructuring costs for the quarter," it said.

Overall, the brokerage expects Tata Motors' revenue to increase 41 per cent year-on-year (YoY) to Rs 88,322.2 crore from Rs 62,493 crore reported in the year-ago quarter. Net profit is seen at Rs 2,813.1 crore as compared to loss of Rs 5,411.2 crore in Q4FY20. On the operational front, Nomura has pegged the firm's earnings before interest, tax, depreciation, and ammortisation (Ebitda) at Rs 11,880.6 crore, up 401 per cent YoY and 3 per cent QoQ. Ebitda margin may expand 965 bps YoY at 13.5 per cent.

Kotak Securities

Analysts at Kotak Securities expect Tata Motors' standalone revenues to increase by 22 per cent QoQ. "We build in standalone Ebitda margin of 5.8 per cent (flat QoQ YoY) led by operating leverage benefits which could likely offset 210 bps QoQ decline in gross margin," the brokerage said.

"We expect JLR revenues (ex China JV) to increase by 23 per cent YoY led by 25 per cent YoY increase in average selling price (ASPs) in Q4FY21 due to positive geographical mix. We expect reported Ebitda margin to decline by 30 bps QoQ to 15.4 per cent," it said.

On the consolidated basis, the brokerage is building a 41 per cent YoY growth in the company's net sales at Rs 88,110 crore while net profit is seen at Rs 2,721.7 crore for the quarter under review. Besides, Tata Motors is also expected to report Ebitda at Rs 12,872.8 crore, up 442.4 per cent from Q4FY20, while Ebitda margin may come in at 14.6 per cent.

Emkay

According to Emkay, "JLR’s GBP revenues should rise 2 per cent on better volumes, while Ebitda margin should contract due to GBP  appreciation, adverse mix (lower share of China region and Land Rover models) and high base due to one-offs relating to VMEs and emission provisions in the previous quarter."

In comparison, the brokerage expects the company's standalone revenues to grow by 27 per cent, driven by higher volumes and realizations (5 per cent). Despite commodity inflation, it expects the company's standalone Ebitda margin to expand 200 bps to 7.8 per cent on better scale, price hikes, lower discounts and higher share of MHCVs

Consolidated revenues, thus, are expected to rise 31.4 per cent YoY to Rs 82,120.4 crore while profit is seen at Rs 2,345.5 crore. According to the brokerage, consolidated Ebitda may surge 360 per cent to Rs 10,910.5 crore while operating margin is expected at 13.3 per cent (up 949 bps YoY but down 193 bps sequentially).

ICICI Securities

Analysts at ICICI Securities believe that Tata Motors may report a muted performance in Q4FY21 despite a sequential uptick in volumes at both JLR and standalone operations, primarily tracking pressure on gross margins due to a rise in input costs and already disclosed exceptional charge (restructuring cash and non-cash costs) amounting to 1.5 billion pound at JLR. For Q4FY21, on a consolidated basis, the brokerage sees Tata Motors' total operating income at Rs 88,698 crore (up 42 per cent YoY, up 17 per cent QoQ), Ebitda at Rs 10,209 crore (up 179 per cent YoY) and margins at 11.5 per cent, down 540 bps QoQ.



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