Tata Motors Q4 Results: Stock opens lower ahead of earnings with JLR guidance in focus

Tata Motors Ltd., the manufacturer of commercial and passenger vehicles, and the parent company of Jaguar Land Rover (JLR), will be reporting its results later on Tuesday, May 13.

The company is likely to reported a muted quarter with volumes having declined for most of its segments during the January-March period.

A CNBC-TV18 poll expects a minor 3% growth in Tata Motors' topline, while its net profit is likely to halve compared to the same quarter last year. The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is likely to decline by 3% year-on-year, while margins are likely to narrow by 80 basis points.

For its subsidiary Jaguar Land Rover (JLR), its net profit may increase by 19% from last year, while revenue may only see a modest 2% growth from last year. Its EBITDA may decline by 5%, while EBITDA margin may narrow by 90 basis points from last year, as per the CNBC-TV18 poll.

During the quarter, Tata Motors is likely to have negative operating leverage due to higher marketing spends and that could turn out to be a drag on margins.

A decline in battery prices can result in commodity tailwinds for its Electric Vehicles business, while accruals from the Production-Linked Incentives (PLI) could be offset partially by higher discounts.

Some key factors to watch during the quarter include discounting and environment tariffs, the impact of freight rates and discounting on the India Commercial Vehicles business, along with upcoming launches.

Tata Motors shares have been in focus recently due to the trade deal announced between the US and the UK, which put JLR in the spotlight, as well as its shareholders having approved the demerger of its commercial vehicles business, into a separate, listed entity.

Shares of Tata Motors ended 1.6% higher on Monday at ₹719.7. The stock has recovered nearly ₹200 from its 52-week low of ₹535.75, having risen 16% in the last one month.