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Tata Motors Q2 Review - All Cards Starting To Fall Into Place: ICICI Securities

Tata Motors Q2 Review - All Cards Starting To Fall Into Place: ICICI Securities

A vehicle exits a Tata Motors Ltd. dealership in Mumbai, India. (Photographer Dhiraj Singh/Bloomberg).
A vehicle exits a Tata Motors Ltd. dealership in Mumbai, India. (Photographer Dhiraj Singh/Bloomberg).

BQ Blue’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 BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Tata Motors Ltd.’s Q2 FY22 operational performance was in line with consensus estimates as consolidated Ebitda margin came in at 6.6% (down 399 basis points YoY).

Lower production impacted Jaguar Land Rover (margins:7.3%/down 374 bps YoY) while domestic business margins remained resilient {passenger vehicle (5.2%) / commercial vehicle (3.1%)}.

JLR cash outflow (~£664 million) was lower than earlier expectations (~£1 billion), largely led by working capital (~£501 million). Cash breakeven (at JLR) has been further reduced to ~85,000 units (earlier: 90,000).

Tata Motors, a market leader in domestic commercial vehicle business, would benefit from the segment’s multi-year growth story (expect more than 30% compound annual growth rate for industry over FY21-FY24E).

Click on the attachment to read the full report:

ICICI Securities Tata Motors Q2FY22 Results Update.pdf

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