Launch triumphs, JLR margin turn the ignition key to gains for TaMo

Some brokerages foresee growth via higher market share, prices, margins

- RAM PRASAD SAHU

The restructuring of domestic operations over the next year, coupled with new launches, increased sales at subsidiary Jaguar Land Rover (JLR), and continued deleveraging, are pivotal factors propelling automotive giant Tata Motors forward.

Momentum in sales volume is expected to be a major driver for the company. JLR's April-June quarter sales surpassed expectations, showing a 5 per cent year-on-year (Y-o-Y) increase, with retail sales up by 9 per cent.

The sales mix at JLR has also been favourable, with the higher-margin Range Rover, Range Rover Sport, and Defender models accounting for 68 per cent of total volumes.

In contrast, the domestic passenger vehicle (PV) business saw an 8 per cent Y-o-Y decline in June, falling short of estimates. Tata Motors has actively adjusted wholesales to manage channel inventory amidst weak retail demand.

Nomura Research sees significant medium-term growth driven by market share expansion, higher average selling prices, and improved margins. Tata Motors aims to increase its market share to 18-20 per cent by 2029-30, up from 14 per cent in 2023-24 (FY24), leveraging its current portfolio and upcoming launches to outpace industry growth rates of 6-7 per cent.