Tata Motors jumps 5% ahead of March quarter numbers, sequential earnings may be strong

Tata Motors share price rallied more than�5 percent intraday Tuesday ahead of January-March quarter earnings due tomorrow.

The owner of luxury car brand Jaguar and Land Rover is expected to report good set of earnings on sequential basis due to favourable base but year-on-year numbers are expected to be weak.

Profit for the quarter is likely to be at Rs 4,041.5 crore, a 6.8 percent decline compared to Rs 4,336.4 crore reported in corresponding period last fiscal, according to Reuters poll estimates. Sequential increase in profit is likely to be 257 percent.

Revenue from operations is seen rising 15.9 percent year-on-year (up 21 percent QoQ) to Rs 89,507.7 crore from Rs 77,217.19 crore on volume growth.

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Tata Motors' standalone sales volumes in March quarter grew by 35 percent YoY and 19.1 percent QoQ while JLR showed volume growth of 15.7 percent QoQ and degrowth of 2.6 percent YoY.

Operating profit is expected to increase 6.2 percent year-on-year (33 percent sequentially) to Rs 11,764 crore for the quarter ended March 2018. The company had reported operating income at Rs 11,080.52 crore in Q4FY17 and Rs 8,851.89 crore in Q3FY18.

Operating profit is likely to improve 116 basis points sequentially but may fall 124 basis points year-on-year to 13.1 percent in Q4FY18.

Edelweiss Securities said, "We expect consolidated operating margins to improve sequentially by 130bps to 12.8 percent YoY driven by operating leverage benefits in India and improving performance in JLR.

"Standalone margins are expected to improve 600bps YoY & 150bps QoQ. JLR��s margins are likely to be at 13.5 percent, lower 100bps YoY, owing to expectations of an unfavourable product mix," Prabhudas Lilladher said, which expects profit growth of 309.7 percent QoQ (4.7 percent YoY) and revenue growth of 24.7 percent QoQ (19.8 percent YoY).

At 13:45 hours IST, the stock price was quoting at Rs 311.60, up Rs 15.05, or 5.08 percent on the BSE.