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Tata Motors Q1FY22 preview: Street expects JLR business, standalone losses; stock down 4.77% in 5 days

On a consolidated basis, the topline is expected to look good for Tata Motors but losses both on standalone as well as JLR business could continue this time around.

Tata Motors is expected to report its first-quarter numbers today, on July 26. In terms of earnings, this time around, the company has already put out a warning for Jaguar Land Rover on July 5 and since then the stock has fallen about 15 percent. The company said although the topline may look good, it is the 1-billion-pound cash outflow that they are expecting as a negative EBIT margin for JLR because of the global semiconductor chip shortage, that is what the street is factoring into in this quarter’s numbers.
Tata Motors’ stock has been under pressure in recent trading sessions. In the last five days, it is down 4.77 percent and in the past month, it is down 14.34 percent. However, in the past six months, it is up close to 10 percent. The stock is currently trading at around Rs 293.60 on the NSE.
On a consolidated basis, the topline is expected to look good, but losses both on standalone as well as JLR business could continue this time around.
The standalone business had its own pressures - quarter on quarter things have worsened, the commercial vehicle business has not been able to recover and volumes have been hit quite a bit on QoQ. For JLR, although on QoQ and YoY basis, the volumes have been good, demand has come back, especially in places like China. It is the global semiconductor shortage that will hit the EBIT performance. All this has kept the stock subdued and street is cautious ahead of the numbers.
Watch the accompanying video of CNBC-TV18’s Sonia Shenoy for more details.