Day: January 28, 2025

Automobile major Tata Motors is expected to announce its December quarter results on January 29, 2025. The company‘s Q3 performance is expected to show varied results across its segments, with revenue growth driven by the strength in JLR and the India passenger vehicle (PV) divisions.  

Analysts project a consolidated revenue of around Rs 1,12,248 crore-Rs 1,18,340 crore, reflecting a growth in the range of 1.5-7 per cent Y-o-Y.  

The profitability for the quarter may face challenges, with adjusted PAT forecasts indicating a 5-14 per cent Y-o-Y decline, reflecting weaker operating leverage and market conditions.

Tata Motors shares were buzzing in trade ahead of Q3 results. At 2:35 PM, Tata Motors share was trading 3.43 per cent higher at Rs 737.60. 

Nomura 

Overall, revenue is expected to increase approximately 7 per cent Y-o-Y, with the Ebitda margin rising 130 bps Q-o-Q to 13.3 per cent, primarily driven by JLR, Nomura said. CV/PV revenues are expected to decline by -1 per cent/-3 per cent Y-o-Y, with Ebitda margins at 11.4 per cent/5.9 per cent (up 66bps Q-o-Q/down 20bps Q-o-Q) due to weak operating leverage.

Thus, they estimate revenue of Rs 1,18,340.2 crore, up 7 per cent Y-o-Y; Ebitda of Rs 15,764.1 crore, up 2 per cent, Ebitda margin at 13.3 per cent, and adjusted PAT at Rs 6,113.9 crore, down 14 per cent Y-o-Y. 

Kotak Institutional Equities 

Tata Motors’ domestic PV business Ebitda is projected to improve 5 per cent Y-o-Y (60 bps Q-o-Q) in Q3FY25, driven by a richer product mix and profitability gains in the EV PV business due to declining battery prices. They also expect Tata Motors’ domestic CV business Ebitda to remain flat Y-o-Y in Q3FY25.  

Thus, analysts project consolidated revenue of Rs 1,12,248.7 crore, up 1.5 per cent Y-o-Y; Ebitda down 8.3 per cent Y-o-Y to Rs 14,055.5 crore; Ebitda margin at 12.5 per cent; Adjusted PAT down 5 per cent Y-o-Y to Rs 5,339.5 crore.

Nuvama 

Analysts at Nuvama said, revenue growth Y-o-Y is expected to be supported by growth in JLR and the India PV divisions. The Ebitda margin is anticipated to expand due to better margins in India CV and PV divisions. A key factor to monitor, they believe, will be the JLR demand and margin outlook. 

Thus, analysts predict revenue at Rs 1,17,615.9 crore, up 6 per cent Y-o-Y; Ebitda at Rs 17,132.4 crore, up 12 per cent Y-o-Y; PAT at Rs 7,669.8 crore, up 9 per cent Y-o-Y.

Sharekhan 

The automobile sector is expected to maintain single-digit revenue growth, though Ebitda margins are likely to contract, mainly due to changes in the product mix in some cases and increased promotional offers to clear inventory post-festive season. 

Thus, it expects Tata Motors to post revenue of Rs 1,13,342 crore, up 2.5 per cent Y-o-Y; Ebitda margin at 12 per cent; PAT down 5 per cent Y-o-Y to Rs 6,677 crore.

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China’s answer – DeepSeek – to the artificial intelligence (AI) tools and models such as Chat GPT triggered a sell-off across global stocks on Monday.  

According to reports, (free) downloads of DeepSeek have already overtaken American rivals in Apple’s US app store. 

The emergence of an almost-as-good AI utility created at much lower cost that also uses much less energy has set the proverbial cat amongst the pigeons. 

Stock of chipmaker NVidia was among the top losers in trade on Monday in the US, with the counter plunging nearly 17 per cent, wiping off $600 billion in its market capitalisation (market-cap).

Tech-heavy NASDAQ slipped 3.1 per cent to 19,342 levels on Monday with NVidia being the top loser.  

Besides tech stocks, the DeepSeek innovation, analysts said, has also triggered fears that demand for energy-intensive AI infrastructure could falter, sending ripples through the markets.  

Here’s how leading brokerages and experts have interpreted the development. 

UBS 

While DeepSeek’s aggressive pricing strategy raises questions on big tech’s high capex intensity, we need to understand that DeepSeek’s models still have many limitations compared to the frontier models from big tech coupled with limited transparency so far on training methodology.  

Investors should stay calm and take advantage of extreme volatility through structures and buy the dip in quality stocks. Any undue correction in quality stocks/tech benchmarks barring a major macroeconomic event historically proved to be good buying opportunities.

Jefferies 

The DeepSeek development means that investing in AI may be nothing like as expensive as previously thought. This should accelerate the advancement of the technology. But at the same time it also means that chief financial officers will start to ask questions about the enormous amounts being spent on computing power in the AI arms race. 

The stock market would at some point this year question all this spending in the continuing absence of clear proof of monetisation. This was, first and foremost, a potential threat to the share prices of the hyperscalers who have been spending the money. But the DeepSeek news will now cause pressure on the AI hardware supply chain on concerns that the likes of Meta will do a U-turn and slash capex spending.

The other issue raised by the DeepSeek news is that, while it is clearer than ever that the age of AI is coming, it is also increasingly equally clear that the long fashionable concepts of “moats”, as applied by fund managers to individual companies in the investment world, looks ever more precarious, if not redundant, in the AI world given the monumental scope for disruption. 

Rabobank International 

The week ahead is replete with events in the form of central bank announcements (including the Fed and the ECB) or a slew of scheduled earnings releases. The latter include tech heavyweights Apple, Tesla, Microsoft, Meta and ASML. 

We wonder whether DeepSeek story sees the market likely to adopt a somewhat asymmetric reaction function when it comes to these releases. This as upbeat reports might be discounted as having preceded concerns over US tech losing its competitive edge while weak results might be seen as indicating the sector was softening even before China’s threat emerged.  

deVere Group 

DeepSeek’s breakthrough signals a shift toward efficiency in AI, which will redefine both energy and AI markets. The opportunities for investors willing to act now are enormous. DeepSeek’s model combines cutting-edge algorithms to slash the energy demands of AI training and deployment. This challenges the assumption that AI’s growth is tied to ever-increasing energy consumption.

While the market is reacting to short-term uncertainty, efficiency-driven AI models will expand adoption into new markets and industries. This means more widespread use, deeper integration, and ultimately, sustained demand for energy solutions. 

Renewable energy providers, in particular, are poised to gain as AI infrastructure evolves to prioritise sustainability and return on investment (ROI). While the immediate reaction in energy stocks reflects uncertainty, the long-term outlook remains robust. Companies driving innovation at the intersection of AI and clean energy will emerge as the leaders of this new era. for energy-intensive AI infrastructure could falter in the months ahead.

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Bank of India Mutual Fund’s new fund offering (NFO), Bank of India Money Market Fund, opens for public subscription today, January 28, 2025. The NFO is an open-ended debt scheme investing in money market instruments.   

Mithraem Bharucha serves as the Fund Manager for the Bank of India Money Market Fund. 

According to the Scheme Information Document (SID), the investment objective is to generate returns with reasonable liquidity for the unitholders by investing in money market instruments. “There is no assurance that the investment objective of the Scheme will be achieved.” The minimum application amount during the NFO is Rs 5,000, with investments in multiples of Re 1 thereafter. The scheme carries relatively low interest rate risk and moderate credit risk.  Bank of India Money Market Fund NFO is set to close on February 3, 2025. While there is no entry load for the NFO, the exit load, as per the SID, is also nil for investors.

The performance of the Bank of India Money Market Fund will be benchmarked against the CRISIL Money Market A-1 Index. The CRISIL Money Market A-1 Index is designed to track the performance of money market funds. 

As per the SID, the Scheme shall invest up to 100 per cent of the total assets in money market instruments with a maturity of up to one year. It retains the flexibility to invest in the entire range of money market instruments. Generally, money market instruments include commercial papers, commercial bills, treasury bills, government securities with an unexpired maturity of up to one year, call or notice money, certificates of deposit, usance bills, and any other similar instruments specified by the Reserve Bank of India from time to time.

Bank of India Money Market Fund: Should you invest?

The scheme is suitable for investors seeking regular income over the short to medium term. It is also ideal for those looking to invest in money market instruments with a maturity of up to one year, as outlined in the SID.

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