Tata Motors’ Q2 results: Weakness in JLR business to affect topline

Auto major Tata Motors is set to announce its quarterly results on Wednesday. The stock has been the worst performing stock in the auto sector this year, with a loss of more than 60 percent odd. It is expected that the company will see another weak quarter this time.

The Q2 earnings are expected to be much muted due to slowdown in Jaguar-Land Rover (JLR). The volumes are likely to be down 20 percent year-on-year(YoY) for JLR as the Chinese market has slowed down substantially. All of this will put pressure on the topline.

EBITDA margins are expected to fall 300 basis points, led by negative operating leverage YoY. One basis point is a hundredth of a percentage point.

 The operating cost has increased due to fixed cost inflation, higher R&D and higher raw material cost.