Nomura expects Tata Motors Ltd. to turn net cash of Rs 12 and Rs 85 per share for fiscal 2025 and fiscal 2026, respectively, from a net debt of Rs 16,000 crore in the fourth quarter of fiscal 2024. Meanwhile, the rerating of Jaguar Land Rover will depend on the success of its electric vehicle models and its ability to sustain margins, the brokerage said.
The brokerage estimates JLR's annual volume sales to reach around 3.98 lakh and 4.05 lakh in fiscal 2025 and fiscal 2026. The car's sales in the first quarter are broadly consistent with Nomura's estimates.
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Nomura expects JLR's EBIT margin to be around 8.4% in the first quarter of fiscal 2025, compared to reported 9.2% in the fourth quarter of FY24 and 8.6% in the first quarter of FY24.
JLR's estimated EBIT margin is at approximately 7.8% for fiscal 2024, lower than the guidance of 8.5%, on the back of risks from rising incentives. It estimates the break-even fresh cash flow for quarter one in fiscal 2025 considering the normal cycle of working capital outflow in first quarter every years, the report said.
From fiscal 2025 on, JLR's volumes may be flattish, but it is likely to focus on revenue growth which should help drive better margins. Its target EBIT margin is more than 8.5% in fiscal 2025, 10% in FY26 and 15% in the medium term.
Jaguar Land Rover's wholesale and retail volumes improved, citing production improvements and sustained global growth.
JLR's first-quarter wholesale volume was up 5% year-on-year, but down 11% sequentially to 97.7 thousand units.
The luxury car maker's retail volumes totaled over one lakh units, up 13% year-on-year but down 2.5% quarter-on-quarter. Its retail sales improved approximately by 9%, from 1.02 lakh units in quarter one of the previous fiscal to 1.11 lakh in first quarter of the current financial year.
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