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Yes Securities Report
Tata Motors Ltd.’s Q4 FY22 were operational beat with consolidated Ebitda higher by ~18% at Rs 87.4 billion as margins expanded ~170 basis points QoQ at 11.1% (estimate: 9%).
Segmentally, Jaguar Land Rover results were in-line while standalone exceeded estimates led by better than expected margins at commercial vehicles 5.9% (up 330 bps) and passenger vehicles at 6.9% (up 370 bps QoQ).
Several internals surprised positively such as reduction in net auto debt to Rs 487 billion in Q4 and ~40 bps QoQ improvement in variable marketing expenses to 0.9%.
Some of these variable may moderate in near-term as Q1 FY23 to see dual impact of ongoing chip shortages compounded by -
Russia-Ukraine tension (less than 2.5% of sales) and
recent China lockdowns impacting both sales and component supplies.
However, strong order backlog at ~168,000 units (versus ~155,000 in Q3 at JLR) and cost control to help partially dilute the impact.
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