With vehicle price hikes and an uptick in volumes Indian automaker Tata Motors is expected to post mid-single-digit revenue growth.
Analysts said the revenue growth will be led by India passenger vehicle business growth and higher volumes of JLR.
“Tata Motors is expected to post mid-single-digit annual revenue growth in Q4FY23 on account of higher volumes overall and price hikes in all segments. We expect higher JLR volumes to bode well for the margins and higher free cash flows to aid in the debt reduction of the company. Our focus will be on the management’s commentary on the demand outlook for Commercial Vehicles and supply chain issues holding up the order book in JLR,” said Dhruv Mudaraddi, Research Analyst, Stoxbox.
Demand in the commercial vehicle segment for the company remained muted during the quarter.
“LCV volumes remained under pressure in the quarter implying a lack of replacement demand in the segment and that the last-mile delivery demand trend has become dormant,” added Dhruv Mudaraddi.
The profitability of the business could be impacted by rising input prices.
“The company’s profitability is likely to remain weak across both JLR and domestic business. Margins are likely to be impacted by a weak product mix, higher expenses towards the launch of new models and rising input costs. Price hikes and improving operating leverage could provide some support to margins,” mentions IIFL Securities.