Tata Motors' Q1 earnings slump due to lower China sales: Sudip Bandyopadhyay, Destimoney Securities

In a chat with ET Now, Sudip Bandyopadhyay, Destimoney Securities, shares his views on Tata Motors' Q1 earnings. Excerpts:

ET Now: Tata Motors' revenues at Rs 61,000 crore are much lower than the Rs 64,000-crore number that we had. Also, their PAT is substantially lower at Rs 2,770 crore. Your initial thoughts on these numbers?

Sudip Bandyopadhyay: I believe China is the most significant factor at play here. That's why the profit margin and the topline are lower.

I would suspect that it happened predominately due to lower sales and realisations in China.

ET Now: But domestically also, their business is not doing too well. Your take?

Sudip Bandyopadhyay: Tata Motors' domestic business has not been doing well for quite some time. Over the past many quarters, their business was predominately being driven by the JLR China numbers. Unfortunately, this quarter they have taken a hit there.

ET Now: Their Q1 margins are at 14.9%. Our estimates were pegging margins at 15%. So on that side, they have not really disappointed.

Sudip Bandyopadhyay: Yes, but the number of vehicles sold and the revenue have come down. And that is a big negative.

I do not think the domestic market swung the needle either way. We have not definitely seen any major upswing or downswing in Tata Motors' domestic sales. So, all the changes on the negative side are certainly driven by the global numbers of JLR, and predominately the China numbers.