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New Delhi: Tata Motors is likely to report a double-digit rise in topline numbers, lifted by the higher sales and rising prices. However, the brokerage said the performance of the Jaguar Land Rover (JRL) segment would be key to watch out for.

The homegrown auto major, scheduled to announce its earnings on Thursday, remains the top pick of brokerages from the sector.

Brokerage firm YES Securities expects Tata Motors’ consolidated revenue to grow 14 per cent to Rs 82,020 crore, whereas JLR revenue is expected to rise 23 per cent on a sequential basis at 5.8 billion pounds.

“Consequently, consolidated margins are expected to contract to 9 per cent (14.4 per cent in 4QFY21 and 9.4 per cent in 3QFY22) led by about 80 basis points QoQ margins contraction at 11.2 per cent in JLR,” said the brokerage firm.

Tata Motors remains a top pick from YES Securities in the auto sector. “With supply challenges withstanding, we remain positive on CVs and PVs led by higher bookings and upcoming new launches,” it said.

Another brokerage firm Kotak Institutional Equities (KIE), said that revenues for the auto stocks under its coverage are likely to remain flat in 4QFY22, led by chip shortage impacting PV production volumes and weak demand.

The brokerage expects to report an improvement in gross margins and EBITDA margins on a sequential basis led by operating leverage benefits.

In the March quarter, KIE saw good margins at 22 per cent, up by 15 basis points from 21.8 per cent, whereas EBITDA margins are likely to jump about 275 basis points to 5.2 per cent in Q4FY22 from 2.4 per cent in Q3 FY22.

“We estimate standalone business revenues to increase by 23 per cent QoQ in 4QFY22 led by increase in volumes and marginal rise in ASPs due to price hikes and richer product mix,” said the brokerage.

On a consolidated basis, it is expecting a rise of 9.5 per cent in profit to Rs 142.02 crore, with an EBITDA margin of 11.9 per cent and an EPS of 4.2 for the quarter.

pegged the consolidated revenue at Rs 75,800 crore with an EBITDA of Rs 8,500 crore and profit after tax (PAT) at Rs 590 crore due to muted performance from JLR. It has maintained a ‘Buy’ rating on the counter.

“Chip shortage continued to dent volumes in Q4FY22. More worrying is the expected pressure in Q1FY23. Contrary to the general trend, Q4FY22 did not turn out to be the best quarter for JLR,” Edelweiss added.


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