Tata Motors to announce Q4 earnings; Here’s what to expect

Automobile major Tata Motors Ltd’s financial results for the fourth fiscal quarter of 2017 (Q4 FY17) due Tuesday are expected to be weighed down by a hit in the Q3 sales even as its luxury unit Jaguar Land Rover is likely to provide ample support. Ahead of quarterly result announcement the shares of Tata Motors were trading up. At 12:55 pm the shares of the company were trading at Rs 453.50 per piece, up 1.14% or Rs 5.10 on the BSE.

In the quarter under review, there was a robust volume at the company’s UK subsidiary, Jaguar Land Rover Automotive Plc. However, the company’s India business took a hit due to poor truck sales caused by a switch to the more strict Bharat Stage IV emission norms. The only good news in an otherwise lacklustre quarter was the 23% growth in passenger car sales due to new models Hexa, Tigor and Tiago.

Hit by demonetization, Tata Motors had reported a 96.2% drop in net profit to Rs 111.57 crore in Q3FY17. In April 2017, the company reported a growth of 23% in its domestic passenger vehicle sales, but its commercial vehicles sales were affected by the ban on the sale of BS-III vehicles. “The higher demand at short notice, was not met in production, as vendors struggled to meet with the higher demand, especially in the MHCV segments,” the company had said in a statement.

According to a research report by Edelweiss, the company is likely to post a consolidated revenue growth of 2% on a year-on-year basis with consolidated margins improving by approximately 230 basis points sequentially to 9.9% driven by strong margin improvement in Jaguar Land Rover, which saw a quarter-on-quarter basis margins improvement of nearly 300 basis points to 12.2%.

“For domestic business, we assume a one-time impact of Rs 2.1 billion to factor in higher discounts to clear the BS-III inventory,” the report said.

Tata Motors