Views on Tata Motors 2QFY2016 Result: Angel Broking

Views of Mr. Bharat Gianani (Sr. Research Analyst - Automobile, Angel Broking) on Tata Motors 2QFY2016 Results:

"Tata Motors 2QFY2016 results were below estimates on the operating front. Consolidated revenues grew marginally by 1% YoY to INR 61,318 cr (coming slightly ahead of our estimates of INR 57,484 cr). Growth was subdued mainly due to flattish growth in JLR. JLR volumes were grew a healthy 12% during the quarter but an adverse mix led to lower realization, thereby dragging the topline. The operating margins at 11.2% were below our estimates of 13.4%. JLR EBIDTA margins at 12.2% were significantly below our estimates of 15%. JLR margins were impacted by lower China sales, adverse product mix and higher launch expenses. During the quarter, Tata Motors reported a loss at the net level due to a one off charge of INR 2,493 cr due to JLR vehicles which were destroyed in explosions caused at the China port location. The company has put an insurance claim for the same which would take some time for processing but has recognized the loss in the current quarter. During the quarter, Tata Motors realized tax credit to the tune of INR 704 cr which resulted into Adj profit at INR 2,223 cr coming in better than our estimates of INR 2,041 cr. We currently have ACCUMULATE rating on the stock but would review our estimates post the disappointing performance at JLR."

Shares of TATA MOTORS LTD. was last trading in BSE at Rs.396.25 as compared to the previous close of Rs. 403.8. The total number of shares traded during the day was 749712 in over 11811 trades.

The stock hit an intraday high of Rs. 404.1 and intraday low of 392.6. The net turnover during the day was Rs. 298671805.

Source : Equity Bulls

Keywords