Tata Motors up 2% ahead of December quarter results

Brokerages believe the company is likely to post steady numbers for domestic business.

Tata Motors’ shares rose 2 percent ahead of its results that will be declared later in the day.

The stock touched an intraday high of Rs 181.55 and an intraday low of Rs 179.00.

Brokerages believe the company is likely to post steady numbers for domestic business.

Standalone volume grew by 1 percent YoY, while JLR volume fell by 4.4 percent YoY, which will drag the company’s consolidated revenues and earnings. INR depreciation against the GBP will inflate reported sales and operating profit. Also, depreciation at JLR is on rising trend due to higher capex.

Brokerage: Edelweiss | Profit: Rs 715.7 crore

The brokerage expects consolidated revenue growth of 6 percent YoY, as the India business continues to remain robust. We expect consolidated operating margins to improve sequentially by 110bps to 9.2 percent due to an improvement in the India and JLR businesses

Brokerage: Kotak Institutional Equities | Profit: Rs 1,1510 crore

The brokerage expects standalone revenues to decline by 1 percent YoY due to flattish volumes and a marginal decline in ASPs (lower mix of higher tonnage MHCV volumes).

“We build in a standalone EBITDA margin of 5.6 percent in 3QFY19 (7.9 percent in 2QFY19 and 8 percent in 3QFY18); YoY decline is due to higher commodity prices, weaker mix and negative operative leverage,” analysts at the firm wrote in their report.

It sees reported EBITDA margin to improve by 180 bps YoY due to lower hedging losses and the company’s cost reduction efforts.At 09:35 hrs Tata Motors was quoting at Rs 180.60, up Rs 2.40, or 1.35 percent, on the BSE.

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