Tata Motors (NYSE:TTM) has been experiencing a notable EBITDA margin expansion across domestic, PV, EV, and CV sectors, consistently surpassing predictions. This strong performance is supported by confident commentary on margin strength and an above-consensus outlook.
The company's global CV revenue rose by 22%, surpassing estimates from BNP Paribas (OTC:BNPQY) (BNPP), despite a -138bp quarter-on-quarter EBITDA margin due to increased material costs and the reversal of inventorisation benefits. The EBITDA margin stood at 11.5%.
Jaguar Land Rover (JLR), a subsidiary of Tata Motors, has been witnessing a stable order book and low variable marketing expenses. This has contributed to a year-on-year revenue growth of +30%, taking the total to GBP6.86 billion, indicating a strong demand environment.
In an effort to regain market share in H2-FY24, Tata Motors recently shifted its focus towards small commercial vehicles (SCVs). The company plans to launch Curvv in 2024 and Sierra in 2025, both built on JLR's Electric Modular Architecture (EMA) platform.
In light of these developments, BNPP has set a target price of ₹785 for Tata Motors, reflecting confidence in the company's strategic direction and robust performance.
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