TaMo numbers below expectation: Gaurang Shah

“If raw material input cost has put pressure, then it is going to be inevitable for not only but other automobile manufacturing companies to take another price hike,” says Gaurang Shah, Head – Investment Strategy,





We have had some statements on Tata Motors. Margin pressure is clearly visible both for Tata Motors as well as for Jaguar Land Rover. The statement made in the press release is that the China lockdown and semiconductor issues continue to plague JLR. What is your reading of the initial numbers that you have seen?

On the face of it, the numbers definitely look below par. I am taking into consideration the fact that there are no extraordinary or one-off items on the balance sheet which remains to be seen but one of the most unwanted stocks in the auto pack did perform.

Now on the fallback of these numbers, one would definitely need to go back to the work terminals and rework on how the future pans out for Tata Motors not only on the domestic front but as it was referred to on the JLR front as well.

If raw material input cost has put pressure, then it is going to be inevitable for not only Tata Motors but other automobile manufacturing companies to take another price hike. If that is the case and in that kind of a scenario, one will need to wait and watch as to what are the numbers in the couple of quarters to come by.

With these numbers, we could see some amount of downward rating. Maybe I am speaking too early but numbers definitely are looking below expectation.

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Tata Motors is saying that we continue to target achieving 5% EBIT margin and $1 billion pound sterling of positive free cash flow in FY23. Is that looking like a challenging prospect?


I guess the worst should be behind us on the operational front and for JLR business, it is very important for certain geographies where they cater to how the situations are turning out over there.

Unfortunately, in the UK, we are facing a lot of problems. China has multiple problems and elsewhere in Europe also, we have issues to deal with. On the domestic front, however, I am right on that. The JLR business has done quite well but only certain geographies doing well for JLR does not augur well.

Other parts of the world should also start contributing. My sense is that possibly the worst is behind us and that is why coming quarters could be a little bit better than what we have seen now.

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Roy Walsh

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