During the quarter, Tata Motors’ revenues from operations increased 32 per cent to Rs 1.05 trillion, up from the Rs 79,611 crore during the July-September period of 2022-23 (Q2FY23). The company’s earnings before interest, tax, depreciation, and amortisation (Ebitda) during Q2 was Rs 13,767 crore, up from the Rs 5,571 crore in the second quarter last financial year.
Ebitda margins came at 15.5 per cent, down 10 bps sequentially, but up 450 bps on YoY basis.
The firm is confident of delivering a stronger performance in the second half of the financial year (H2FY24), buoyed by healthy order books at its luxury subsidiary Jaguar Land Rover (JLR), strong demand for heavy trucks in commercial vehicles, and new-generation products in passenger vehicles.
Also Read : Suzlon Energy hits 9-year high; up 5% on strong Q2 results, order book
At JLR, the broader guidance on cash flow remains unchanged with FCF expected at over £2 billion in FY24 with net debt reducing to less than £1 billion by the end of FY24.
On the consolidated basis, at Tata Motors’ automotive net debt declined by Rs 5,000 crore in H1FY24 from Rs 43,700 crore as of March ’23 to Rs 38,700 crore as of September 2023.
“In an interesting move, Tata Motors India will share its premium pure electric PV platform i.e., Avinya with JLR for its mid-sized SUV’s. With guidance of robust profitability, FCF generation and consequent Debt reduction at JLR for FY24E, and impending IPO of its subsidiary i.e., Tata Technologies, we remain positive on the stock,” ICICI Securities said in a note.
Tata Motors should witness a healthy recovery as supply-side issues ease (for JLR) and commodity headwinds stabilise (for the India business). It will benefit from the commercial vehicle (CV) uptrend and stable growth in passenger vehicles (PVs), company-specific volume/margin drivers, and a sharp improvement in FCF as well as a reduction in net debt in both JLR and India businesses, said those at Motilal Oswal Financial Services.