Tata Motors Q2 Results Review - Improved Product Mix At JLR Benefit Margins: Prabhudas Lilladher

Prabhudas Lilladher Report

Tata Motors Ltd.’s Q2 FY23 consolidated revenue surprised at Rs 796 billion (up 11% QoQ, our estimate: 762 million) largely led by improved product mix at Jaguar Land Rover.

Though JLR reported merely 5% QoQ growth in wholesales, average selling prices improved 14% on the back of improved supplies of new Range Rover/RR Sport (current production of 2400/week versus 1100/week in June 2022). This also led to ~400 bps QoQ of Ebitdam (10.3%) improvement.

We expect margins to further improve in H2 led by improved realisations and product mix (Defender, RR and RR Sport account for 72% of the order book 205,000 units).

Chip supply issue is now sorted out and management expects volumes more than 160,000 units in H2 (147,000 in H1); supplies should step-up in FY23.

For the passenger vehicle and commercial vehicle business, 70 bps of impact came on Ebitdam from residual high commodity costs – PV/CV Ebitdam contracted 70/50 bps QoQ.

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