Tata Motors likely to report strong Q1 results; stock may gain 20% in one year

MUMBAI: Tata Motors may not be doing well in the domestic market but still the company may report strong quarterly results. Its subsidiary JLR is expected to drive the profits on the back of strong global sales.

"Tata Motors is expected to register 34 per cent increase in sales on consolidated basis, driven by higher JLR volumes and translation gains. We expect EBITDA margins to improve 70 bps yoy but decline 140bps qoq at 15.1 per cent," said Bank of America Merrill Lynch report.

"Profits are expected to grow at a much sharper rate of 52 per cent at GBP462mn benefiting from operating leverage. India business is likely to remain weak albeit slight improvement q-o-q thanks to cost cutting initiatives," the report added.

According to Elara Securities report, Tata Motors’ standalone business is expected to bleed at the operating level yet again as volume crashed by 28% Y-o-Y.

However, analysts remain bullish on the stock and expect the uptrend to continue.

"Tata Motors is available at seven times PE multiple. Upside is potentially is huge right now. The stock is somewhere around Rs 470 but we think that upside is still there. An upside of 20 per cent can be expected if you hold on for a year’s time. Downside looks limited for the stock," said Yogesh Mehta, PCG Advisory-Equities, Motilal Oswal Securities to WT Now.

At 02:50 p.m.; the stock was at Rs 474.45, up 0.87 per cent, on the BSE. It touched a high of Rs 476.85 and a low of Rs 465.05 in trade today.