In light of Tata Motors (NYSE:TTM)' revised margin guidance and Q2 performance, Prabhudas Lilladher has increased the company's EBITDA projections for FY24/25/26 by 7%/4%/4%. This comes despite lower realization across Jaguar Land Rover (JLR), Commercial Vehicles (CV), and Passenger Vehicles (PV) segments, which led to below-average revenue. However, higher margins at CV and PV ensured that the overall EBITDA was in line with projections.
JLR has raised its FY24 EBIT margin guidance from over 6% to approximately 8%, anticipating a stabilization of the declining Average Selling Price (ASP). The company's solid order book of 168,000 units is expected to maintain higher ASP and margins. In addition, a reduction in discounts at CV boosted Q2 margins, a trend that is projected to continue.
An improved second half of the fiscal year is projected for PVs and Electric Vehicles (EVs) due to JLR's volume ramp-up, domestic CV strength, and a focus on increasing PV market share driven by rising EV penetration. This optimistic outlook for the second half is supported by an emphasis on PV market share, increased margins, a strong order book, and fewer discounts at CV.
InvestingPro Insights
Tata Motors (TAMO) has been demonstrating promising financial performance, as evidenced by InvestingPro's real-time data and tips. The company's revenue growth has been accelerating, which aligns with Prabhudas Lilladher's increased EBITDA projections for the coming years. This growth, combined with strong earnings, should enable the management to sustain dividend payments, benefiting shareholders.
Moreover, Tata Motors is a prominent player in the Automobiles industry, and its strong order book of 168,000 units is expected to maintain higher ASP and margins. The company's net income is also projected to grow this year, further solidifying its financial position.
For more detailed insights and over 10 additional tips, consider exploring the InvestingPro platform. This will provide a comprehensive understanding of the company's performance, helping you make informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.