Target: ₹785

CMP: ₹645.95

Tata Motor’s EBITDA margin expansion continued to beat consensus. Strong margin beat in the domestic businesses, JLR’s margin guidance upgrade and confident commentary on margin strength in PV, EV and CV businesses give us confidence about our above-consensus margin outlook.

While JLR’s order book is normalising, variable marketing expenses (VME) remain much below historical levels, suggesting that the demand environment is still healthy. JLR revenue (GBP6.86b; +30 per cent y-o-y) was slightly below our GBP6.95b estimate. EBITDA margin (14.9 per cent, -138bp q-o-q) was below BNPP estimates (16.9 per cent) on higher material costs and reversal of inventorisation benefits. Global CV revenue grew by 22 per cent y-o-y. EBITDA margin of 11.5 per cent (+82bp q-o-q) beat BNPPe. confident of maintaining double-digit margin on regaining SCV market share.

Tata Motors is confident of gaining market share in H2-FY24 due to the recent new launches (PVs and EVs) and a refocus on SCVs (CV). New launches: Curvv (2024) and Sierra (2025). Avinya would be based on JLR’s EMA platform. We see solid margin execution driving consensus earnings estimate upgrades.