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Tata Motors: Reports better than expected Q2FY22 performance

News: Consolidated net sales at Rs.61,379 crore were higher by 7.6% QoQ, with margins down 94 bps QoQ to 10.1%. Consolidated loss after tax was at Rs.4,402 crore. JLR revenues were down 22% QoQ with margins at 7.3%, down 174 bps QoQ.

Views: Revenue beat primarily tracked higher than expected JLR volumes, with margin resilience arriving on the back of operating leverage gains. Improvement in India PV margins (up 360 bps YoY to 5.2%) was encouraging. The company has maintained medium and long term margin and FCF guidance for JLR. In the near term, sequential improvement is expected across businesses amid some easing of chip shortages, with H2FY22E seen delivering positive EBIT and FCF in India and JLR.