Tata Motors Q2 preview: Net profit likely to see double-digit growth despite lower volumes; check details

In a stock exchange notification issued last month, the company said, “A meeting of the board of directors of Tata Motors Ltd is scheduled to be held on Friday, November 8, 2024, inter alia, to consider and approve the audited standalone financial results and unaudited consolidated financial results (with limited review) for the second quarter and half year ended September 30, 2024.”

Experts predict flat revenue growth for Tata Motors in the second quarter of the current financial year on account of drop in sales across divisions, along with discounted pricing in the passenger vehicle segment.

The Tata Group company’s profit, however, is expected to show healthy growth due to favourable commodity prices, improved profitability in the Jaguar Land Rover (JLR) business and a shift in model mix towards more premium segments.

According to estimates, Tata Motors’ consolidated revenue is expected in the range of ₹1,00,183 crore to ₹1,06,297 crore in Q2FY25. This indicates a flat revenue compared to ₹1,05,128 crore reported in the same quarter a year ago.

Net profit is estimated to have been between ₹4,270 crore and ₹5,150 crore during the second quarter, compared to ₹3,832 crore in the year-ago quarter.

Q2 business update

Tata Motors’ sales in the domestic and international market for Q2 FY25 stood at 2.15 lakh vehicles, which was 11.5% lower than the 2.43 lakh units sold during Q2 FY24.

Total commercial vehicle sales fell 19% year-on-year to 84,281 units during the second quarter, while total passenger vehicle sales slipped 6% to 1.30 lakh units.

June quarter performance

In the quarter ended June 2024 (Q1FY25), Tata Motors had exceeded market expectations by a wide margin.

Consolidated profit after tax (PAT) for the first quarter of 2024-25 had surged 72.4% year-on-year to ₹5,592 crore, while revenue from operations was up 5.6% to more than ₹1.08 lakh crore.

Tata Motors’ earnings before interest and tax (EBIT) had come in at ₹9,100 crore during Q1 FY25, with EBIT margin of 8.4%.

Key metrics to watch out for

Analysts will be watching for the company’s announcement on new launches scheduled for the current financial year. The focus will also be on the demand and margin outlook, which will set the tone for earnings for the coming quarters.

Tata Motors share price

The sentiment around Tata Motors shares has been muted for the past few days. The auto stock dropped as much as 2.66% to hit an intraday low of ₹817.3 apiece on the NSE on Thursday, a day before the Q2 results. However, shares of Tata Motors recovered some of the early losses to close 2.13% lower at ₹821.80 apiece on the NSE.

Over the past five sessions, the stock has declined 3.25%. In the last month, it has also dropped 10.4%. However, year-to-date, shares of Tata Motors have rallied 4.5%, rising 26.65% in the past year.