Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

India’s electric vehicle (EV) sector, often seen as a key player in the country’s clean energy transition, has been called “irrelevant” without government <keyword id="20231384" type="General" weightage="20" keywordseo="incentives" source="keywords">incentives</keyword> by a recent Bernstein research report. The report highlights the serious challenges automakers face in achieving profitability and scaling operations in the EV segment, which remains heavily reliant on financial support from the government. <h2>Struggling to achieve profitability</h2>The Bernstein report reveals that generating profitable margins in the Indian EV sector is proving to be an uphill battle for automakers. “It is tough to generate sufficient margins and get scale in EVs. Even with hefty incentives, incumbent OEMs are still unprofitable,” the report stated. This underscores the fact that even with <keyword id="20022183" type="General" weightage="20" keywordseo="government-subsidies" source="keywords">government subsidies</keyword> aimed at promoting <keyword id="20138204" type="General" weightage="20" keywordseo="electric-mobility" source="keywords">electric mobility</keyword>, automakers are struggling to make EVs financially viable. High production costs, limited infrastructure, and relatively low consumer demand all contribute to this issue. Traditional automakers, particularly in India’s two-wheeler market, are facing significant financial losses. According to Bernstein, while some niche startups may survive, their long-term market share will likely remain limited, and competition will primarily be between established original equipment manufacturers (OEMs). The key challenge for these OEMs is achieving the scale and cost reductions required to compete with the well-entrenched internal combustion engine (ICE) sector. <h2>Reliance on incentives</h2>One of the most striking conclusions from Bernstein’s analysis is the deep reliance of the EV sector on government subsidies. Without these incentives, the <keyword id="19952060" type="General" weightage="100" keywordseo="EV-Industry" source="keywords">EV industry</keyword> would be unable to compete with traditional ICE vehicles. “The EV Industry is not relevant without incentives currently, and to break the ICE sector, it needs intense focus, scale, and continued cost downs,” the report emphasised. This indicates that while government schemes like GST benefits have helped reduce the cost difference between EVs and ICE vehicles, they are not enough to ensure the long-term sustainability of the EV sector. Bernstein estimates that the overall EV two-wheeler industry in India generates around USD 1.3 billion in annual revenues, but without government support, the sector incurs an EBIT loss of approximately USD 300-400 million. The high cost structure of EVs, combined with the relatively low sales volumes, makes it difficult for companies to operate without subsidies. <h2>Established players face mixed fortunes</h2>Among India’s leading two-wheeler manufacturers, Bernstein noted that <keyword id="19897354" type="General" weightage="20" keywordseo="Bajaj-Auto" source="keywords" meta.keywordsubtype="org" meta.entityname="Bajaj Auto" meta.hostid="265" meta.entityid="Bajaj Auto">Bajaj Auto</keyword> and <keyword id="20326963" type="General" weightage="20" keywordseo="TVS-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="TVS Motors" meta.hostid="265" meta.entityid="TVS Motors">TVS Motors</keyword> are on a similar footing in terms of their performance in the EV space. Bajaj Auto received an "Outperform" rating from Bernstein due to its lower valuations, while TVS Motors was rated "Market Perform" after it was found to be losing approximately 7.5% in EBITDA, or Rs 11,000 per vehicle, despite generating a gross profit margin of 7% without subsidies. <div type="Article" hostid="261" msid="113631992" title="Tata Nexon EV with a bigger battery launched starting at ₹13.99 lakh" mstype="2" mssubtype="0"></div>Hero MotoCorp, a major player in India’s automotive market, lags behind both Bajaj and TVS in terms of its EV offerings. Bernstein also pointed out that Eicher Motors, which is expected to launch its own <keyword id="19895203" type="General" weightage="20" keywordseo="electric-vehicles" source="keywords">electric vehicles</keyword> soon, is likely to remain “sub-scale and less relevant” in the competitive EV landscape. Interestingly, <keyword id="19897349" type="General" weightage="20" keywordseo="Ola-Electric" source="keywords" meta.keywordsubtype="org" meta.entityname="Ola Electric" meta.hostid="265" meta.entityid="Ola Electric">Ola Electric</keyword> (Ola-E) stands out as a startup that has been able to generate positive operating earnings (EBITDA) from its premium models like the S1 Pro and S1 Air, even as it incurs losses on its mass-market model, the S1X. “Our analysis indicates that Ola-E is generating positive operating EBITDA from its premium models, such as the S1 Pro and S1 Air while incurring a loss on its mass-market model, the S1X,” the report said. While Ola has shown some promise, it too remains heavily dependent on subsidies to maintain its financial health. <h2>Long-term outlook</h2>Bernstein’s report paints a challenging picture for the future of India’s EV sector, suggesting that while dominant startups may survive, the majority of the competition will come from traditional automakers. However, without significant scale and continued cost reductions, the EV industry will struggle to become self-sustaining. <div type="Article" hostid="261" msid="113315022" title="Waiting for the festive season to buy an EV? Cabinet approves PM E-Drive subsidising most EVs, sans electric cars" mstype="2" mssubtype="0"></div>Bernstein emphasised that to truly compete with ICE vehicles, the EV sector needs to focus on scaling up operations, reducing costs, and maintaining long-term commitment. Until these conditions are met, India’s EV industry will remain highly dependent on government support and may continue to face an uphill battle for relevance. In conclusion, while India’s EV sector is seen as a vital part of the country’s clean energy future, Bernstein’s analysis highlights that it is far from being self-reliant. The industry’s heavy dependence on government incentives raises questions about its long-term sustainability and relevance, particularly in the face of ongoing challenges with profitability and scale. (With inputs from ANI)

Why has Bernstein called India’s EV sector 'irrelevant'?

<ul><li>Tata Motors stock is the top gainer on the 50-stock Nifty50 index after its March-quarter update that showed recovery in the reeling <keyword id="45218" type="General" weightage="20" keywordseo="jlr" source="Orion">JLR</keyword> volumes.</li><li>Analysts have lauded the automaker’s improvement in sales, highlighting better chip supply and better-than-expected booking run rate for JLR.</li><li>Global sales for <keyword id="6354362" type="General" weightage="20" keywordseo="jaguar-land-rover" source="Orion">Jaguar Land Rover</keyword> (JLR) stood at 1.07 lakh vehicles for the March quarter, with Jaguars accounting for 15,499 units and Land Rovers for 91,887 units.</li></ul>Shares of Tata Motors rose on Monday after the automaker’s global wholesale vehicle sales recorded an 8% on-year growth for the March quarter despite high inflation and rising borrowing costs, topping analysts’ expectations. Global sales for Jaguar Land Rover (JLR) stood at 1.07 lakh vehicles for the March quarter, with Jaguars accounting for 15,499 units and Land Rovers for 91,887 units. Shares of Tata Motors were the top gainers on the 50-stock Nifty50 index after its March quarter update that showed recovery in the reeling JLR volumes. Analysts have lauded the automaker’s improvement in sales highlighting better chip supply and a better-than-expected booking run rate for JLR. “All three businesses of Tata Motors are in a recovery mode. While the India CV (commercial vehicles) business will see a cyclical recovery, the India PV (passenger vehicles) business is seeing a structural recovery. JLR is also witnessing a cyclical recovery, supported by a favourable product mix,” said analysts at Motilal Oswal. “However, supply-side issues will delay the recovery process. While there will be no near-term catalysts from the JLR business, the recovery in the India business (~50% of the sum of the parts (SoTP) will continue,” added the report. Adding to the investor cheer, in March, the automaker sold 46,847 cars, overtaking rival Hyundai in the domestic passenger vehicle sales segment. In comparison, Hyundai sold 45,703 cars during the same month. Tata Motors registered a 27% on-year increase in passenger vehicles sales for March, far ahead of Hyundai, which registered a growth of 4.4%. The former increased its market share to 13.39% in FY23 while the latter’s market share fell to 14.51%. “We expect the demand for personal vehicles to remain robust with the trend of electrification further strengthening,” said Shailesh Chandra, MD, Tata Motors Passenger Vehicles. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage house </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rating </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹508 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CLSA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹544 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">JP Morgan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Neutral </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹438 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BoFA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹475 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goldman Sachs </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹550 </td></tr></tbody></table> Goldman Sachs has upgraded its rating on Tata Motors to Buy while raising the target price to ₹550 from ₹480 to factor in an improving volume outlook at JLR. It has also raised its FY24-25 EBITDA estimates by 15%/16% while saying that the market was underestimating JLR’s EBIT margin potential. EBITDA stands for earnings before interest, taxes, depreciation and amortisation while EBIT is earnings before interest and taxes. Tata Motors stock flies high with 17% gains in 2023 so far Besides, the stock has been on an uptrend this year because of its growing auto sales – shares of Tata Motors have surged 17% in 2023 so far. The automaker has been in a recovery mode since the December quarter when it <a href="https://www.businessinsider.in/business/corporates/news/tata-motors-in-top-gear-reports-net-profit-of-2958-crore-in-q3-its-first-after-seven-quarters/articleshow/97319081.cms">reported a profit for the first time </a>after seven quarters of losses. Adding to it, the auto industry has recently hiked prices of vehicles from the start of the new fiscal year. Typically, automakers hike prices of vehicles effective from April 1. This time, the price hikes are led by high inflation and regulatory requirements. Along with Tata Motors other automakers including Maruti Suzuki, Honda and Hero MotoCorp have increased prices of their vehicles to comply with new regulatory norms required for a cleaner environment. The Indian auto industry has geared up to meet the stricter emission norms under phase two of the BSVI standards. From April 1, vehicles will need to have an onboard diagnostic (OBD2) device to monitor the real-time driving emission levels to meet the stricter emission norms. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/telecom-companies-q4-revenue-likely-to-moderate-due-to-lack-of-significant-tariff-hikes/articleshow/99368163.cms">Telecom companies’ Q4 revenue likely to moderate due to lack of significant tariff hikes</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/tata-motors-overtakes-hyundai-as-indias-second-largest-car-maker-in-march/slidelist/99300135.cms">Tata Motors overtakes Hyundai as India's second largest car maker in March</a>

Tata Motors rallies nearly 8% on strong JLR sales in March quarter; Analysts bullish with an eye on margins

<ul><li><keyword id="6354512" type="General" weightage="20" keywordseo="Infosys" source="Orion">Infosys</keyword> reported a sequential decline in its net profit in the June quarter as high wage hikes weighed on it.</li><li>This caused Infosys’s EBIT margin to spiral down to the lowest point in the last two years.</li><li>Nomura has also lowered its earning per share (EPS) expectation by 1-3% for the next two fiscal years.</li></ul>India’s second largest IT services company Infosys reported a sequential decline in its net profit in the June quarter, as the high wage hikes weighed down on its margins. Infosys’s EBIT (or earning before interest and taxes) margin declined to 20.1%, the lowest in the last two years. The decline was due to multiple factors, including wage hikes, lower utilization and higher sub-contracting expenses, some of which will continue to impact the company in the ongoing September quarter as well. Brokerage firm ICICI Securities is of the view that the increase in travel costs, wage hikes for senior employees in Q2FY23 and supply-side cost pressures will weigh on Infosys margin. Nomura believes that the impact of wage hikes may be limited, while improvement of utilization and effects of price increases in contracts are likely to be gradual. The company has retained its EBIT margin at the lower end of 21-23% range, triggering brokerage firms like ICICI Securities and Nomura to cut their forecasts to 21% as well. “Recovery in FY24F will be driven by pyramid optimization, lower sub-con [subcontracts] as travel normalizes and some benefits from price hikes in renewals and new deals,” Nomura added. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Old EBIT Expectations </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">New EBIT Expectations </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY2022 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22-24% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY23F </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY24F </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22.4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY25F </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22.1% </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: Company Data, Nomura Note: ‘F’ in the table stands for Forcast. Nomura has also lowered its earning per share (EPS) expectation by 1-3% for the next two fiscal years, factoring in lower margins, partly offset by better currency. Infosys’ competitor Tata Consultancy Service (TCS) is expected to outperform in this domain. Infosys’ revenue witnessed a sequential growth of 6.8% in the June quarter as its revenue stood at ₹34,470 crore. Meanwhile, the constant currency revenue growth stood at 5.5% sequentially and 21.4% year-on-year. The company has increased its revenue guidance for FY23 to 14-16% — up from the previous guidance of 13-15% — despore the supply side challenges and high travel costs. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> “We continue to gain market share and see a significant pipeline driven by our Cobalt cloud capabilities and differentiated digital value proposition,” said Infosys CEO and MD Salil Parekh, sounding a bullish tone for the rest of FY23. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/finance/banks/news/rbi-governors-recipe-for-banks-of-the-future-oodles-of-social-media-new-tech-a-dash-of-human-touch/articleshow/93138812.cms">RBI governor’s recipe for banks of the future: Oodles of social media, new tech &amp; a dash of human touch</a> <a href="https://www.businessinsider.in/business/ecommerce/news/e-commerce-platform-shopify-lays-off-1000-employees/articleshow/93151446.cms">E-commerce platform Shopify lays off 1,000 employees</a> <a href="https://www.businessinsider.in/business/news/indias-newly-digitized-msmes-need-offline-marketing-as-much-as-online/articleshow/93138395.cms">India’s newly digitized MSMEs need offline marketing as much as online</a>

Margin recovery likely an uphill task for Infosys after Q1 shock

<div class="KonaFilter image-container float_right"><div class="image on-image"><a href="http://www.flickr.com/photos/66724786@N00/215024971/">Flickr/Stuart R Brown</a></div></div>One of the hottest ongoing debates in the stock market is about the <a href="http://www.businessinsider.com/category/profit-margins">sustainability of historically high profit margins</a>.
High <keyword id="393803" type="UNKNOWN" weightage="60" keywordseo="profit-margins">profit margins</keyword> have allowed companies to amplify modest sales growth into impressive earnings growth.
However, the debate often gets confused when people don't make the distinction between the operating profit margin and the net margin.
The operating profit margin is generally measured as earnings before interest expenses and taxes, or EBIT. This margin reflects the operating efficiency of a company.
The net profit margin is the profit after all operating, interest, and tax expenses are subtracted. It's the bottom line. Unlike the EBIT margin, the net margin is impacted heavily by financial planning decisions.
"The margin story continues to be far less about efficiencies than smart tax and balance sheet planning," said Citi's <keyword id="1050500" type="PERSON" weightage="60" keywordseo="Tobias-Levkovich">Tobias Levkovich</keyword> in a note to clients this week. "While there is much discussion about companies being able to manage their businesses wonderfully and thus even small revenue gains can generate more impressive bottom-line increases, this mindset is ill- founded, in our view. The broad data shows that overall S&amp;P 500 operating margins have been flat to down for more than six quarters and the true story behind net margins has been lower effective tax rates and interest expense."
Levkovich argues that the earnings surprises we've seen so far during this reporting season have been of low quality because of the nature of these margin trends.
Below is a chart of the EBIT margin and a chart of interest as a percentage of sales. The latter chart reflects the low interest rate environment.
<div class="KonaFilter image-container click-to-enlarge"><div class="image"><a title_source="Citi Research" title_caption="" class="zoomin" href="http://static5.businessinsider.com/image/52702d60ecad04a14b8b456a-960/screen%20shot%202013-10-29%20at%205.47.38%20pm.png"></a>Citi Research</div></div>
Many people often argue that corporations have been able generate increasing levels of profits by laying off workers and squeezing the workers they keep. However, employee costs are included in the EBIT margin, which has been trending lower for the S&amp;P 500.
"The most disturbing issue is the view that EBIT margins have been so good and that companies have been incredibly efficient running their operations," added Levkovich. "Figure 10 should dissuade anyone from believing that misperception. After-tax margins on the other hand have been solid but that reflects lower effective tax rates and lower interest expense as a percent of sales due to low interest rates (see Figure 11). In this context, management teams have been far better at tax planning and balance sheet engineering which is not as impressive as running their underlying businesses but that is not the current talking points for many misguided market observers."

2 Profit Margin Charts You Must Understand Before You Enter The Debate About Profit Margins

<ul class="summary-list"><li>Wall Street analysts expect Amazon to deliver an earnings beat when it reports quarterly results on Thursday </li><li>Expanding growth in Amazon's cloud platform is a bullish driver, analysts said. </li></ul>Wall Street is gearing up for <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/amzn-stock">Amazon</a> to deliver strong quarterly financial results after the closing bell on Thursday, though uncertainty lingers about how the company might navigate a slowdown in consumer spending. Most analysts anticipate solid earnings and further upside for Amazon stock, driven by its cloud platform and advertising strength. Yet, concerns linger over slowing retail margins and Amazon's rising investments in other areas of its business. That includes Project Kuiper, Amazon's initiative to deploy thousands of satellites for an increased broadband network, as well as investments in AI.Here's what analysts are saying ahead of the company's earnings.<h2 id="7d0771bb-aa3e-412b-a84f-9826870e8bca">CFRA: Searching for investment balance</h2>CFRA considers Amazon a compelling multi-year profit and cashflow story, but the firm is cautious about near-term prospects. "Growth may not be linear due to a tepid consumer spending environment, lumpy AWS deal volume, and accelerated investments in areas like Project Kuiper, generative AI, same-day fulfillment, and Prime Video digital content."Analyst Arun Sundaram said this will translate into a "modest" third-quarter earnings beat. CFRA expects revenue to rise 10.5% year-over-year and GAAP operating profit to climb 36%. CFRA's estimates are at the upper end of Amazon's guidance range."Overall, investors will be looking for AMZN to strike the right balance of growth vs. investments," Sundaram said.The note said that while Amazon's operating margins are expected to continue growing into 2025, reinvestment into other areas of the business will slow this expansion.CFRA trimmed its Amazon price target to $219 a share on October 21, indicating 13% upside ahead.<h2 id="29d2fdf4-34f7-4afe-b90a-0a79ffeca902">Bank of America: Mixed results incoming</h2>BofA's Justin Post suggested investors brace for a mixed bag of third-quarter results.Bank of America views consensus revenue estimates as too high and predicts $157 billion for the quarter. However, the bank's outlook for operating profit stands above consensus views at $15 billion.The bank expects the quarter's leading growth drivers will include Amazon Web Services, the firm's AI-led cloud-computing platform. According to Post, margins here will likely be better than Wall Street is expecting"AI demand likely improved further in 3Q, and we think investors may be expecting 20% y/y growth for 3Q, which would suggest the largest 3Q in terms of sequential dollars added at $1.39bn," he said.Consumer spending uncertainty could be a concern, and BofA expects a slight deceleration in discretionary retail sales growth.The firm has a "buy" rating on the stock and a $210 price target, which implies an 8.3% gain from current levels.<h2 id="a9024ebe-7cb6-44b8-a728-de20774ef87c">JPMorgan: AWS acceleration leaves room for optimism</h2>JPMorgan cited Amazon's expanding cloud platform and solid store growth as key reasons to be bullish on the stock.The bank said easing optimizations, workload migrations, and AI's growing monetization will support further AWS acceleration through this year, leading to 20% growth year-to-date.In line with Bank of America, the firm anticipates third-quarter net sales to reach $157 billion, below consensus estimates of $157.3 billion. Meanwhile, retail profits in the last quarter faced headwinds, and consumers appear cautious about spending. Shoppers eager for a deal are weighing on Amazon's average selling prices, the bank said.JPMorgan has an "overweight" rating on Amazon and a $230 price target. This suggests an 18.6% upside from current levels.<h2 id="fb352aa7-bfbb-4165-82f3-89a50fc7ea22">Wedbush Securities: Don't worry about rising investment costs</h2>Wedbush Securities has cheered Amazon's growing cloud segment and a revenue shift toward high-margin advertising. Together, these should help offset headwinds brought on by the company's spending on investments elsewhere. "We think the risk/reward is attractive heading into results as investor expectations for 2H profitability have moderated, AWS growth continues to accelerate, and advertising momentum is building into 2025," a team of analysts led by Scott Devitt wrote.The firm said investors have toned down margin expectations due to Amazon's spending in new investment areas, such as Project Kuiper. While this may require more investment from the company over time, Wedbush doesn't expect it to impact profitability in the near-term.Wedbush reiterated its "outperform" rating and $225 price target, implying a 16% gain from current levels.<h2 id="e4b3e058-a63d-4251-8620-4b1f8f0899e3">Morgan Stanley: Bullish into 2025</h2>Analysts led by Brian Nowak focused on Amazon's fourth-quarter guidance, suggesting that the company's earnings before interest and taxes might come in lower than expected."We see AMZN's high and growing focus on lower-priced, lower-margin essentials driving merchandise margin pressure... which is holding back the near-term slope of its N. America retail profit ramp. Expected discounting in a competitive holiday season (and picky discretionary consumer) create further near-term uncertainty," they said.The bank expects fourth-quarter EBIT of around $17.5 billion, 1% below consensus expectations.But looking forward to 2025, the bank recommends sticking with the stock as retail pressures will be a short-term headwind. Corporate efficiencies and shipping costs will make lower-priced essentials profitable for the company through next year, the bank projected.Morgan Stanley has a $210 price target for the stock, representing upside of about 8% from Wednesday's share price.

Wall Street is bullish on Amazon earnings despite uncertainty around consumer spending, rising investment costs

<ul class="summary-list"><li>Gucci had a challenging third quarter partly due to its APAC slump, per Kering's latest earnings call.</li><li>The Italian luxury brand's sales dropped 25% this quarter compared to the previous year.</li></ul>Gucci just had a bad quarter, and Kering is attributing the lackluster performance to a slump in its Asia Pacific market.The Italian luxury brand saw a 25% drop in quarterly revenue as compared to a year before.Gucci's parent company, French luxury group Kering, reported $1.77 billion in sales in the third quarter of 2024, compared to $2.39 billion in the same period last year."Sales from the directly operated retail network were down 25% on a comparable basis, the House being particularly impacted by market conditions, especially in Asia-Pacific," Kering's press release on Wednesday said of Gucci.The Asia Pacific region, which accounted for about a third of Gucci's global revenue this quarter, was the major dampener on sales.According to a third-quarter revenue infographic by Kering, sales in the APAC region were down 38% compared to the previous year."With discipline and determination, we are executing a far-reaching transformation of the Group, and at Gucci in particular, at a time when the whole luxury sector faces unfavorable market conditions," the group's CEO, François-Henri Pinault, said in the release."This severely impacts our performances in the short term," he added.Kering's performance was weaker than analysts had predicted."Overall, we were expecting a challenging 3Q print, and some level of reduction in FY24E EBIT guidance, however the magnitude of earnings erosion in the short term is worse than expected," analysts at RBC said in a note seen by Reuters."Of course, the debate continues to center on Gucci. How can the brand recover its mojo, how will margins ever build towards the 41%+ mid-term target, especially after FY23?" Jefferies analysts, led by James Grzinic, wrote in a note released on Wednesday.Luxury brands have been struggling in the Asian market, particularly in China. LVMH <a target="_blank" class="" href="https://www.businessinsider.com/lvmh-luxury-louis-vuitton-struggles-china-slowdown-2024">reported a 3% year-over-year decline in sales</a> in the third quarter due to waning demand from Chinese consumers.An ongoing property crisis, geopolitical tensions, and high youth unemployment rates have weakened consumer confidence in the country, which was once heralded as one of the world's hottest luxury markets.However, a bright spot for Gucci in Asia was Japan. According to Kering, Gucci saw a 7% increase in sales in Japan in the third quarter compared to the start of 2024.Luxury <a target="_blank" class="" href="https://www.businessinsider.com/rich-chinese-flock-to-japan-in-search-of-luxury-bargains-2024-7">sales in Japan have been strong</a> despite a downturn across Asia. This was partially because of its weakened currency, which attracted foreign tourists to buy luxury items on its shores."Right now, the devaluation of the yen is driving a lot of tourism to Japan," Amrita Banta, managing director of luxury insights firm Agility Research &amp; Strategy, told Business Insider in July.Apart from Gucci, Kering's other brand, Yves Saint Laurent, also suffered a loss. YSL's sales were down 12% compared to the same period last year, Kering reported.Shares for Kering fell nearly 1.5% after its earnings were released on Wednesday in Europe. Kering's stock has fallen over 40% year-to-date.The third quarter earnings come shortly after Kering appointed Stefano Cantino as Gucci's new chief executive on October 8. Cantino was previously the brand's deputy CEO. Representatives for Kering did not respond to a request for comment from Business Insider sent outside regular business hours.

Things aren't looking great at Gucci, and Kering says its APAC slump is to blame

<ul class="summary-list"><li>Airbus reported a third-quarter profit of $1 billion on Wednesday. Boeing lost $6 billion in the same period. </li><li>The European company has more orders and appears to be coping better with supply-chain issues.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/airbus-struggling-outsider-beating-boeing-737-max-a320neo-2024-1">Airbus</a> reported its third-quarter earnings on Wednesday, which showed its strength over rival Boeing.The European planemaker posted a quarterly profit of 983 million euros ($1 billion) — a sharp contrast to <a target="_blank" class="" href="https://www.businessinsider.com/boeing-q3-results-earnings-loss-ceo-vows-iconic-again-2024-10">Boeing's $6.1 billion loss</a> for the same period it announced last week.UBS analyst Ian Douglas-Pennant said investors should be reassured by Airbus' profit margins, "although commentary on supply chain weakness may offset this."The stock dipped on Thursday before turning positive. Although the shares are flat for the year to date, Airbus is worth about $123 billion — $28 billion more than Boeing. Its shares have slumped almost 40% this year. Here are four key ways Airbus has been outshining its American rival this year.<h2 id="8c6b07dc-d532-4fcd-adc6-83b4bbcde314">1. Customer confidence</h2>Airbus has outsold Boeing since 2019, when the <a target="_blank" class="" href="https://www.businessinsider.com/boeing-crashes-groundings-timeline-737-max-777-air-force-tanker-2024-1">737 Max</a> suffered the longest grounding for a US airliner following two fatal crashes that killed almost 350 people.Customers grew frustrated with Boeing in the wake of January's Alaska Airlines 737 Max blowout because it signaled <a target="_blank" class="" href="https://www.businessinsider.com/boeing-737-max-quality-control-company-culture-merger-finances-2024-1">quality-control problems</a> and affected production.In the first nine months of this year, Airbus' 667 gross orders were more than double Boeing's tally of 315.The Airbus A320 family leads the industry in single-aisle planes and looks set to gain further with its game-changing <a target="_blank" class="" href="https://www.businessinsider.com/wizz-airbus-a321xlr-no-frills-economy-cabin-seats-range-2024-10">A321 XLR</a>, which will unlock longer routes. The first was delivered to Spain's Iberia on Wednesday.<div type="image" title="The first Airbus A321XLR delivered to Iberia" height="1125" width="2000" msid="114820649" hostid="261" sizebytes="64566"></div>On the same day, <a target="_blank" class="" href="https://www.businessinsider.com/saudi-arabia-riyadh-air-airbus-a321neo-order-blow-boeing-2024-10">Riyadh Air ordered</a> 60 Airbus A321neos despite speculation late last year that the new Saudi airline would opt for Boeing 737 Max jets for its single-aisle fleet.<h2 id="d89e6722-c912-4b49-b3df-ef65ced4d1f7">2. Coping better with huge backlogs</h2>Sales are one part of the puzzle, along with delivering planes on time."We believe the primary focus among investors is the execution of aircraft deliveries," Royal Bank of Canada analyst Ken Herbert said in a note to clients.Both planemakers have huge backlogs: Boeing has more than 5,400 orders, while the Airbus total is about 8,750.<a target="_blank" class="" href="https://www.businessinsider.com/neither-boeing-nor-airbus-won-this-years-farnborough-airshow-2024-7">Supply chain constraints</a> on labor and raw materials have hampered the industry this year, but Airbus has been coping better. It has delivered 497 planes this year compared with Boeing's 291."Airbus' main task is ramping up production of its popular airliners beyond even prepandemic rates," Morningstar's Nicolas Owens said in a note.Like last year, <a target="_blank" class="" href="https://www.businessinsider.com/airbus-lowers-targets-after-benefiting-from-boeing-struggles-2024-6">Airbus expects deliveries</a> to increase in the final three months of the year, meaning it will meet its goal of 770 planes. The guidance confirmation was "arguably the biggest surprise of the release," Deutsche Bank analyst Christophe Menard said in a note.<div type="image" title="Airbus employees work on the A321 assembly line of the Airbus plant in Cornebarrieu, France" height="3628" width="5442" msid="114820646" hostid="261" sizebytes="1052908"></div>A prime issue for Airbus is a scarcity of jet engines, which Bank of America analysts said remained "concerning," but added: "It appears Airbus has much of what they need to meet the guidance."Boeing has far more problems. Regulators <a target="_blank" class="" href="https://www.businessinsider.com/boeing-secures-737-max-order-but-delays-getting-worse-2024-7">capped 737 Max production</a>, and assembly lines have slowed down following scrutiny of its manufacturing processes. <a target="_blank" class="" href="https://www.businessinsider.com/boeing-strike-rising-tension-complaint-union-nlrb-2024-10">Boeing workers have also been on strike</a> in a dispute about to enter its seventh week.<h2 id="4e9147dd-bb52-4b3a-b888-4d2c66cebfde">3. Defense and space</h2>Commercial airplanes make up the bulk of both company's businesses, but both have defense and space divisions.Boeing's operation was in the red to the tune of $2.3 billion this quarter, which it largely blamed on losses on military programs.It also took a <a target="_blank" class="" href="https://www.businessinsider.com/boeing-lost-250-million-on-starliner-2024-10">$250 million hit on the Starliner project</a>. The spacecraft suffered helium leaks and its astronauts are set to return to Earth after eight months rather than eight days — and courtesy of Elon Musk's <a target="_blank" class="" href="https://www.businessinsider.com/spacex-elon-musk">SpaceX </a>instead.<a target="_blank" class="" href="https://www.businessinsider.com/airbus-european-aviation-cutting-jobs-space-defence-boeing-rival-2024-10">Airbus' defense and space</a> division has suffered too, and the company announced up to 2,500 layoffs earlier this month and took a charge of 989 million euros ($1.08 billion) in the second quarter.This quarter, Airbus recorded earnings on the EBIT measure of 143 million euros ($155 million), including a 51 million euro gain from acquiring the remaining 50% of OneWeb — a satellite constellation similar to <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-starlink-qatar-airways-productivity-bosses-video-call-meetings-2024-10">Starlink</a>.It appears SpaceX could threaten business for both Boeing and Airbus. Faury did not name Musk's company on Wednesday's earnings call, but said the European space industry "needs to transform in order to remain competitive against other global players, including some new players."<h2 id="015da783-2764-4dd1-8be6-57e225e53ebe">4. Stability</h2>In a duopoly, it might be tempting to twist the knife and criticize a struggling rival's problems, yet Airbus has been careful with its words in the face of Boeing's woes.Faury said in February the <a target="_blank" class="" href="https://www.businessinsider.com/airbus-ceo-boeing-737-max-blowout-makes-very-humble-safety-2024-2">Alaska Airlines blowout "makes us very humble"</a> and it's "never good when an incident is happening, whatever the type of plane."Commercial aircraft CEO Christian Scherer said at the Farnborough Airshow in July: "When one of the players loses its way, first and foremost, we're focused on what we have to do at Airbus."<div type="image" title="A collage of Airbus CEO Guillaume Faury and Boeing CEO Kelly Ortberg" height="1080" width="1440" msid="114820651" hostid="261" sizebytes="97462"></div>Investors and customers can also find confidence in more stability at Airbus, with CEO Faury announcing in the earnings call that shareholders will vote on renewing his contract.Since Faury took over at Airbus in 2019, three people have run Boeing.Dennis Muilenburg and <a target="_blank" class="" href="https://www.businessinsider.com/boeing-dave-calhoun-failed-to-turn-boeing-around-737-max-2024-3">Dave Calhoun</a> were both ousted from Boeing following different 737 Max crises. <a target="_blank" class="" href="https://www.businessinsider.com/boeing-terrible-24-hours-turnaround-analysts-union-vote-production-backlog-2024-10">Kelly Ortberg</a> has only been in charge since August but has a plan to turn things around after a turbulent time with the strike, layoffs, and regulatory scrutiny.

4 ways Europe's Airbus is faring better than Boeing

<ul class="summary-list"><li>Tesla stock fell 8% after the company reported third-quarter earnings that missed analyst expectations.</li><li>Wall Street was unimpressed by the results and comments from Elon Musk about the future of the Cybertruck.</li></ul><a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> stock dropped as much as 8% on Thursday as investors reacted to third-quarter results <a href="https://www.businessinsider.com/tesla-earnings-q3-report-live-updates-guidance-analyst-call-stock-reaction-2023-10">that missed analyst expectations,</a> and some analysts are ringing the alarm bell.<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-quotes-cybertruck-optimus-banks-debt-real-estate-2023-10">Comments from Tesla CEO Elon Musk during the conference call</a> didn't reassure investors either, with Musk warning that the ramp-up of production for the Cybertruck will be incredibly difficult. "We dug our own grave with Cybertruck. Nobody digs a grave better than themselves," Musk said.Here's how Wall Street analysts are reacting to Tesla's third-quarter report. <h3>JPMorgan: 'Nearly ~$800 billion valuation looks increasingly unsustainable'</h3>Analysts highlighted that even after a slew of price cuts on all of its vehicles, Tesla was still unable to deliver more vehicles. That could point to an underlying issue with demand, according to JPMorgan."We think it is important to remind investors that Tesla has not sold more vehicles than was earlier expected as a result of the 15-20% price cuts it has implemented across its lineup in all global markets. Rather, Tesla has had to institute these price cuts only to sell fewer vehicles than analysts earlier expected," JPMorgan said.The bank also noted that Tesla's third-quarter EBIT margin of 7.5% is no longer a standout among other automakers, with Ford and General Motors seeing similar margins of 8.4% and 7.2% in the second quarter, respectively.After the third-quarter earnings results, Tesla's "nearly $800 billion valuation looks increasingly unsustainable with EBIT margin and revenue growth now at or below recent General Motors and Ford levels and [its] year-to-date free cash flow yielding just 0.4%," JPMorgan said.JPMorgan reiterated its "Underweight" rating and $135 price target, representing potential downside of 40% from current levels.<h3>Wedbush: 'mini disaster'</h3>Analyst Dan Ives said Tesla's conference call was "not an inspiring one for the bulls" as Musk highlighted the challenges about falling profit margins and the production roadmap of the Cybertruck. "We would characterize last night's conference call as a 'mini disaster' as the Street wanted to get their arms around the falling margins and constant price cuts seen globally, but instead we heard from a much more cautious Musk which focused on a higher interest rates, FSD/AI investments, and highlighting the difficult path for Cybertruck production over the next 12 to 18 months," Ives said. Also not encouraging for Tesla bulls is the fact that Musk said further vehicle price cuts could be possible as amid a difficult macro economic environment.Wedbush reiterated its "Outperform" rating but lowered its price target to $310 from $350, representing potential upside of 38% from current levels.<h3>Bank of America: 'ongoing risk from price cuts'</h3>BofA said downtime at its factories and price cuts were a double whammy that weighed on profits."There is ongoing risk from price cuts aimed at improving affordability for a much larger set of consumers," analysts warned."We reiterate our Neutral rating on Tesla, balancing near-term risks from the broader macro, increasing competition, and the impact of recent price cuts against its efforts to reduce costs, meaningfully grow, and unique ability to remain agile," the bank said.Bank of America also lowered its price target to $290 from $300, representing potential upside of 29% from current levels.

'Valuation looks increasingly unsustainable': Here's how Wall Street is reacting to Tesla's third-quarter earnings miss

<ul class="summary-list"><li>LVMH's $15.8 billion Tiffany acquisition was its biggest ever — and was met with high expectations.</li><li>Some investors are skeptical about the turnaround, but things are looking up at the jewelry brand.</li></ul>On an April night last year, a veritable who's who — Blake Lively! Gabrielle Union! Hailey Beiber! Katy Perry in concert with the Rockettes! — made their way to midtown Manhattan. Many wore outfits with pops of robin egg blue.They were there to celebrate the renovation, whispered to be the most expensive retail remodel ever, of the <a target="_blank" href="https://www.businessinsider.com/tiffany-and-co-landmark-nyc-flagship-store-photos-2023-5">Tiffany and Co. Landmark store</a> on New York's 57th Street and Fifth Avenue.The store wasn't the only thing under renovation. When luxury giant <a target="_blank" href="https://www.businessinsider.com/lvmh-buys-tiffany-jeweler-discount-dispute-luxury-retail-merger-2020-10">LVMH shelled out $15.8 billion</a> for storied jewelry company Tiffany in 2021, it faced outsize expectations. It was the conglomerate's biggest acquisition ever. It had also been a dramatic process, with LVMH trying to duck out of the deal and eventually buying Tiffany for hundreds of millions of dollars less.One of LVMH's biggest challenges was reinvigorating the brand, which had taken a beating in the 2010s and become a mid-market version of its former self. Going from mass appeal to upmarket is tough in any industry, let alone in jewelry, where things move slowly. Plus, pushing an American brand further into the massive luxury market of China isn't easy, no matter the macroeconomic conditions.That's led some in the industry to whisper that things haven't turned around with the speed <a target="_blank" href="https://www.businessinsider.com/who-is-bernard-arnault-owner-louis-vuitton-lvmh-net-worth">LVMH boss Bernard Arnault</a> would have wanted. It may just require a bit more patience."The perception of investors is, 'Tiffany's not working,'" Erwan Rambourg, the global head of consumer and retail research at HSBC, told Business Insider. But "I think if you speak to people internally at LVMH, they're super happy."He continued: "To turn around a luxury brand is difficult, but to turn around a jewelry brand — it takes a lot more time than to turn around a handbag company or a ready-to-wear-heavy company."Revenue-wise, things are already on the up. HSBC estimates Tiffany's sales will be $5.96 billion this year — up 83% from 2020. And while its EBIT margin is still lagging behind that of <a target="_blank" href="https://www.businessinsider.com/cartier-van-cleef-richemont-winning-luxury-beating-lvmh-kering-2024-6">jewelry competitor Cartier</a>, per the bank's estimates, it's set to hit 20% next year. Profits in LVMH's jewelry and watches division, which is predominantly made up of Bulgari and Tiffany, were up 7% last year. On the luxury resale site The RealReal, Tiffany is the most-searched jewelry brand of 2024 so far.LVMH, which does not break out revenue for individual brands, did not respond to requests for comment from Business Insider.It looks as if the LVMH playbook — spending big on marketing, raising prices, focusing on the in-store experience — hasn't failed."I'm very confident about Tiffany, but it takes time," Arnault told Bloomberg last month. "You cannot do things instantly, you know?"<h2 id="ae329a86-609c-4961-8d3c-466bdfa927b4">How Tiffany lost its luster</h2>Since <a target="_blank" href="https://www.businessinsider.com/tiffany-and-co-history-iconic-luxury-brand-2019-11">Tiffany</a> first started buying diamonds in 1848, it has been a destination for the wealthiest and most prestigious Americans: It's where Abraham Lincoln purchased earrings and a necklace for Mary Todd to wear to an inaugural ball and where Theodore Roosevelt bought his engraved hunting dagger.But by 2019, when LVMH first tried to buy Tiffany, the jeweler had decidedly lost its luster. Sales had fallen throughout the 2010s, and margins were low.The brand had lowered pricing on its more accessible lines, selling bracelets and the like for $200 or even less. The result was that Tiffany went from outfitting first ladies to sometimes being seen as a has-been mall brand preferred by, as the head of global luxury goods at Euromonitor Fflur Roberts put it, the very traditional stereotype of a middle-class white American."You should be ashamed of selling products that are competing with Pandora if you aspire to be competing with Cartier," HSBC's Rambourg said, adding that, at the time of the acquisition, Tiffany was a sort of "sleeping beauty."<div type="image" title="Tiffany landmark building" height="2400" width="3600" msid="111535341" hostid="261" sizebytes="551234"></div>To make matters worse, it had developed an overreliance on silver, which had fallen out of favor with European and Chinese buyers, and its stores had become dated and obsolete."Asia is a humongous market for luxury, but lots of Chinese consumers were saying, 'when I go to Tiffany, it's like going to a hospital; it's cold, it's clinical,'" Rambourg said.<h2 id="b41ab4fb-f7ee-47a4-962c-0fde0bd949b4">LVMH deploys its nearly bulletproof playbook</h2>Paris-based LVMH is a brand of brands, and Bernard Arnault's baguette and butter is buying companies and making them blow up."It was really exciting to think that a brand that is traditionally very American and has a very strong American or North American heritage, that this <a target="_blank" href="https://www.businessinsider.com/lvmh-brands-iconic-luxury-goods-bernard-arnault-2019-10">big global luxury conglomerate</a> is buying it with obviously a huge amount of industry knowledge and financial backing," Euromonitor's Roberts told BI.LVMH has done it in jewelry before, with the more upscale Bulgari, which it purchased in 2011 (its classic Serpenti collection starts at $1,600). By 2019, the brand's revenue doubled, and profit increased fivefold."Bulgari became one of the top preferred gifting brands for Chinese high net worth individuals — that was a really good achievement," Jelena Sokolova, a senior equity analyst for Morningstar, told BI.Meanwhile at Tiffany, LVMH is using a team of <a target="_blank" href="https://www.businessinsider.com/cartier-history-luxury-jewelry-watchmaker-worth">Cartier</a> veterans. ("Arnault has been not so secretly obsessed with Cartier over decades," Rambourg said.)Step one is marketing: Make people <a target="_blank" href="https://www.businessinsider.com/tiffany-co-new-diversity-plan-black-artists-students-hbcu-investment2022-7">talk about Tiffany again</a> — and use big names to do that. Even before the star-studded opening of the Fifth Avenue store, the brand brought in the big guns, Beyoncé and Jay-Z, in a multifaceted campaign incorporating a Basquiat.Another campaign incorporated the slogan "Not Your Mother's Tiffany," a not-so-subtle nod to the fact that the brand needed a makeover, and a partnership with Nike brought it new relevance.Next, there had to be a product rehaul. To sell itself as upscale, many products going for less than $300 were cut or their prices raised. Gold — popular in China — was incorporated more into collections, and it purchased a 71.26-carat yellow diamond to show its dedication to fine jewels.There was also a renewed focus on branded lines, like the Lock and T collections, which are the "equivalent of putting a big fat logo on a bag," Rambourg said. The hope was that <a target="_blank" href="https://www.businessinsider.com/tiffany-lvmh-hiring-gen-z-apprenticeship-make-jewelry-2023-10">Tiffany products</a> would become status symbols, the equivalent of a Cartier Love bracelet or Van Cleef Alhambra necklace, which is particularly desired in China."Their goal was to obviously expand the reach, so to make it more global, and to increase, Asia Pacific was No. 1," Roberts said.<div type="image" title="Tiffany T collection and Lock collection bracelets" height="1500" width="3000" msid="111535340" hostid="261" sizebytes="89432"></div>The final and ongoing step involves renovating those dated retail locations. Not all will have the <a target="_blank" href="https://www.businessinsider.com/lvmh-bernard-arnault-ordered-tiffany-nyc-store-makeover-getting-lost-2023-4">grandeur of the Landmark store,</a> but there will be warmth, color, and an overall refresh.The before-and-after <a target="_blank" href="https://www.businessinsider.com/lvmh-creating-neighborhoods-around-its-brands-2024-4">store renovation</a>, especially given "the obsolescence of the previous version and how colorful, welcoming, feminine and commercially efficient the new concept is," will be a big deal, Rambourg said.<h2 id="48339e50-a83a-4344-9fbf-6b12e8b9e09f">Growing pains have tarnished Tiffany</h2>But reviving a luxury brand isn't easy, and investors have been murmuring that Tiffany's turnaround hasn't met expectations. It's still Van Cleef Alhambra bracelets on the arms of influencers and celebrities — not Tiffany Ts. (Although Taylor Swift was recently spotted with a ring from the T line, which may change that.)"Tiffany has been underperforming other jewelry brands in the last few quarters," Chiara Battistini, JPMorgan's head of European luxury and sporting goods research, told BI.Part of it is the industry's nature: Fine jewelry is, by definition, not an everyday purchase.Someone may buy a new pair of shoes every few months, allowing them to experiment with new brands and become a loyal shopper in no time at all. Jewelry is a rare splurge. When people shell out a paycheck or two (or more), they want it to be on something they know will have lasting appeal and are thus less likely to experiment. That means it takes longer for <a target="_blank" href="https://www.businessinsider.com/jewelry-whats-popular-and-out-of-style-right-now-2024">new trends</a> — the Tiffany T, perhaps — to catch on and gain the status of a Cartier Love bracelet."At the very, very high end, the chances are you'll be a bit more careful because it's a huge investment, and you want to make sure that that fashion or trend will last," Roberts said.China, specifically, has proven challenging. Nearly 50% of Tiffany's sales are still in the US, one of the most challenging markets for luxury at the moment. Macroeconomically, China has not maintained the post-pandemic growth many in the industry were hoping for.There's also the sort of je ne sais quoi that can't simply be fixed with money. Hiring influencers and raising prices can only do so much to remove the tarnish of "uncool" from Tiffany, especially with younger consumers.It "still needs to add to the fine jewelry offer with more contemporary, less intricate, and highly recognizable designs," Battistini said.And regardless of sales growth, all of the brand work — the marketing, the store renovations — is expensive and translates to a temporary hit to profitability.<h2 id="b9daa0b7-14ce-40bb-b8f5-a63d9e34f8fe">Tiffany still has time to shine</h2>Since 1961, when Audrey Hepburn immortalized it in "Breakfast at Tiffany's," the brand's Fifth Avenue flagship has held a romantic allure — it's also one of the brightest spots in LVMH's Tiffany takeover.The Landmark, as it's called, underwent a massive renovation before reopening in 2023, including adding a café."Tiffany has been hugely successful with the <a target="_blank" href="https://www.businessinsider.com/blue-box-cafe-what-its-like-have-breakfast-at-tiffanys-2020-1">Blue Box Cafe</a> — it's a tourist destination in itself," Roberts said. "When you go into a Tiffany store, you're going to expect to have that amazing experience in customer service."<div type="image" title="Hailey Bieber at Tiffany opening" height="595" width="892" msid="111535346" hostid="261" sizebytes="47658"></div>And if LVMH gets its way, the other pieces of its plan for Tiffany will similarly fall into place over time."It is a very long journey, especially in jewelry," Sokolova said. " You shouldn't expect that to happen sort of overnight."The store renovations, which analysts agree are a key component of the strategy, are certainly happening gradually. There are about 300 Tiffany locations, and only 30% of them will be renovated by the end of this year, Rambourg said. It will take another year before half of them are up to the company's standard.But once those renovations and the marketing blitz surrounding them are complete, margins will have a chance to catch up."This year, I believe Tiffany will underperform its jewelry peers because they don't have the appropriate retail setup. Conversely, whatever the macro next year, I'm quite convinced they will outperform strongly," Rambourg said.In another bright spot, branded jewelry — just the thing Tiffany has leaned into — is set to continue to grow, including in China. Branded jewelry was only 15% of the market in 2019 and is expected to reach 25% to 30% of the market next year, according to a 2021 McKinsey report, with growth driven predominantly by Asia."It's a growth industry, not just a market share gain industry," Sokolova said."There's still an upside from switching from nonbranded to branded."It's already having a trickle-down effect: On <a target="_blank" href="https://www.businessinsider.com/how-the-realreal-is-using-ai-to-find-fakes-2024-5">The RealReal</a>, demand for the brand is up 14% from last year.And quite simply, there is the fact that <a target="_blank" href="https://www.businessinsider.com/chinese-fans-asked-lvmh-ceo-arnault-bless-their-children-2024-6">LVMH very rarely fails</a> and is taking its signature approach full speed ahead. "Whether it's handbags, whether it's Champagne, whether it's cognac" — or whether it's jewelry, LVMH's attitude, Rambourg said, is "Let's do what we do in every single other sector. Let's dominate."

Critics roasted LVMH for spending big on Tiffany. 4 years later, the bet doesn't look so bad.

<ul><li>Mid-tier companies like L&amp;T Technology Services, Persistent Systems and Coforge are expected to report better growth than IT majors, say analysts. </li><li>Most of them are largely expected to deliver either a flat or a slight QoQ improvement in margins, with the exception of Cyient. </li><li>LTTS, which will see the full impact of SWC acquisition this quarter, is expected to deliver double-digit revenue growth but its margins are expected to be impacted. </li></ul>The Indian IT sector is bracing itself for a tough quarter and a year ahead, as organisations across the world are cutting down their discretionary spends, thanks to an uncertain economic outlook. Most IT sector companies are expected to present a muted earnings report card for the first quarter of FY24. Within the IT pack, mid-tier companies like L&amp;T Technology Services (LTTS), Persistent Systems and Coforge are expected to show better growth <a href="https://www.businessinsider.in/business/corporates/news/it-companies-like-tcs-infosys-wipro-hcl-tech-q1-2023-24-earnings-preview/articleshow/101482733.cms">as compared to their larger peers</a>. Tata Consultancy Services (TCS) and Infosys are expected to show a flat revenue growth in constant currency (CC) terms QoQ, while Wipro is expected to post a decline. The rest of the midcap universe, however, is expected to present fair growth with the exception of Cyient and Mphasis, which are likely to see declines. “Mid-tier IT growth premium is expected to continue with sequential growth performance led by Persistent Systems. The laggard in mid-tier IT will be Mphasis with an expectation of a sequential decline,” said a report by HDFC Securities. Q1FY24 projections for QoQ revenue growth in CC terms <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nuvama </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IIFL Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Cap </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">LTTS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11.1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12.3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Cyient </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-2.4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-2.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Coforge </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.9% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Persistent Systems </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.9% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mphasis </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1% </td></tr></tbody><tbody></tbody><tbody></tbody></table>Source: Research reports Best amongst equals Like their larger peers, most of the midcap companies are also expected to see either a flat or a slight de-growth in margins, in spite of tailwinds from rupee depreciation. High wage costs will most likely eat into the margins of most tech companies, including the bigger ones. Mphasis, which is largely expected to report a revenue decline, is expected to deliver a better performance in terms of margins. “EBIT margin expected to be up slightly, by 10 bps QoQ, due to higher offshore mix and operational efficiencies despite revenue drag,” said IIFL Securities. EBIT refers to earnings before interest and taxes. LTTS, which will see the full impact of SWC acquisition this quarter, is expected to deliver double-digit revenue growth but its margins are expected to be impacted. The company acquired Smart World &amp; Communication (SWC) Business of L&amp;T in January 2023. “Organic margin to see strength aided by revenue growth but reported margin to see a dip of around 170 bps QoQ led by the impact of SWC integration,” says a report by Axis Capital. In spite of a bleak sectoral outlook, most analysts are closely watching how the second half of the year will pan out. They will be paying close attention to the deal commentary, growth that’s to be seen in the top clients, and hiring and attrition trends to hunt for any silver lining in the dark clouds. SEE ALSO <a href="https://www.businessinsider.in/business/corporates/news/it-companies-like-tcs-infosys-wipro-hcl-tech-q1-2023-24-earnings-preview/articleshow/101482733.cms">IT sector Q1 earnings preview: All eyes on deal wins, revenue guidance cuts</a> <a href="https://www.businessinsider.in/business/news/fmcg-q1fy24-preview-dilemma-between-price-cuts-and-volume-growth/articleshow/101519331.cms">FMCG sector Q1 preview — Caught between price cuts and volume growth</a>

Mid-tier IT companies expected to outperform the big guns

<ul><li>Sector watchers anticipate robust double-digit year-over-year revenue growth for most 4-wheeler companies </li><li>Analysts are optimistic about <keyword id="42747" type="General" weightage="20" keywordseo="tata-motors" source="Orion">Tata Motors</keyword>’ profit margins due to strong JLR sales. </li><li>Sales volumes of two-wheelers (2W) have experienced a slight year-on-year decline. </li></ul>The <keyword id="46265" type="General" weightage="20" keywordseo="auto-sector" source="Orion">auto sector</keyword> has been recovering, albeit slowly, after the pandemic. The second quarter of the current financial year (FY2024) saw wholesale trends exhibit a mixture of outcomes, with most segments experiencing an increase in sales volumes. Three-wheeler (3W) sales showed a significant year-on-year (Y-o-Y) recovery, while passenger vehicles (PV) saw growth in the mid-single digits, according to the India Autos report by BNP Paribas. However, sales volumes of two-wheelers (2W) experienced a slight year-on-year decline. A closer look at retail volume market share shows that in the 2W segment, <keyword id="6359783" type="General" weightage="20" keywordseo="bajaj-auto" source="Orion">Bajaj Auto</keyword> lost 2.3 percentage points in market share when compared to the same period the year before, while Honda Motorcycle &amp; Scooter India lost 0.9% market share. Meanwhile TVS Motor Company and Suzuki gained market share by 1.7 and 1.1 percentage points respectively in the same time period. In the PV segment, <keyword id="50805" type="General" weightage="20" keywordseo="mahindra-and-mahindra" source="Orion">Mahindra and Mahindra</keyword>, Toyota and <keyword id="44883" type="General" weightage="20" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword> India gained market share of 1.6, 1 and 1 percentage points respectively year-on-year, while Tata Motors and Kia lost market share by 0.6 and 1.1 percentage points respectively. Experts anticipate robust double-digit year-over-year revenue growth for most companies, with the exception of Bajaj Auto and Hero MotoCorp Limited. Substantial volume growth in the last quarter has been observed, except for the 2W segments, which has allowed them to take advantage of operational efficiency and a favourable product mix. <cmsannotation type="cmsannotation" annotationid="Analysts are optimistic about Tata Motors’ profit margins" comment="Subhead" text="Analysts are optimistic about Tata Motors’ profit margins">Analysts are optimistic about Tata Motors’ profit margins</cmsannotation> Analysts at BNP Paribas are optimistic about Tata Motors' profit margins due to strong Jaguar Land Rover (JLR) sales. In regards to other companies, they expect mixed or in-line results when compared to consensus expectations. The analysts take a pessimistic stance on the two-wheeler (2Ws) sector, citing expectations of persistently low growth, subdued festive seasons, the disruptive influence of electric vehicles (EVs), and heightened competition that could negatively impact the sector's profitability. However, they express preference for passenger vehicle original equipment manufacturers (OEMs) such as Maruti Suzuki, Mahindra and Mahindra, as well as globally-oriented companies like Tata Motors. These companies are better positioned to achieve sales growth and maintain healthy margins during the economic upswing, particularly due to their disciplined pricing strategies. Price targets (TPs) for select stocks have been increased, taking into account the shift in their valuation basis to September 2024, recent demand trends, and the inclusion of valuation related to Hero MotoCorp's (HMCL) financing subsidiary. They highlight that Maruti remains their top choice among the investments. <cmsannotation type="cmsannotation" annotationid="Expectations for different automakers" comment="Subhead" text="Expectations for different automakers">Expectations for different automakers</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Maruti Suzuki" comment="Subhead" text="Maruti Suzuki">Maruti Suzuki</cmsannotation> For Maruti Suzuki , analysts recommend a "BUY" with a target price set at ₹13,000, while the current price is at ₹12,700. This is based on a price-to-earnings (P/E) ratio of 29 times the estimated earnings per share (EPS) for September 2025. The target multiple remains the same, but it has been adjusted for the next quarter. The target multiple is based on the five-year average next twelve months (NTM) P/E, as per Bloomberg consensus estimates, to account for a gradual recovery in the demand cycle. The target price has increased due to the forward adjustment in valuation. <cmsannotation type="cmsannotation" annotationid="Mahindra &amp; Mahindra" comment="Subhead" text="Mahindra &amp; Mahindra">Mahindra &amp; Mahindra</cmsannotation> For Mahindra &amp; Mahindra, the recommendation is a "BUY" with a target price of ₹1,905 (current price: ₹1,930). The valuation includes a sum-of-the-parts (SoTP) approach, with a target multiple similar to that of Escorts for the Farm Equipment Sector (FES). In the automotive sector, the target multiple is also unchanged and rolled forward by a quarter. A holding company discount of 10% is applied, similar to Escorts. However, there's a 20% discount compared to peers Maruti Suzuki (MSIL) and Ashok Leyland (AL) due to concerns about automotive market share loss. The target price has slightly decreased due to earnings estimate cuts offsetting the roll-forward of the valuation. <cmsannotation type="cmsannotation" annotationid="Bajaj Auto" comment="Subhead" text="Bajaj Auto">Bajaj Auto</cmsannotation> For Bajaj Auto, the recommendation is "HOLD" with a target price of ₹4,900 (current price: ₹4,600). The valuation is based on a sum-of-the-parts (SoTP) approach using a 16x target multiple for Bajaj Auto's internal combustion engine (ICE) business in September 2025. The Electric Vehicle (EV) business is valued at 2.3x the estimated EV revenue for the same period. The target multiple for EV aligns with global EV companies' market cap/revenue multiples for December 2025. The target price has risen due to higher earnings estimates and a valuation base shift. Additionally, the value of Bajaj's stake in Pierer Bajaj AG, with holdings in PIERER Mobility AG, is included in the assessment. <cmsannotation type="cmsannotation" annotationid="Tata Motors" comment="Subhead" text="Tata Motors">Tata Motors</cmsannotation> Tata Motors gets a "BUY" recommendation with a target price of 770, mirroring the current price. The valuation relies on a sum-of-the-parts (SoTP) method, averaging various valuation methods, such as EV/Sales, EV/EBITDA, EV/EBIT, and P/E ratios. The multiples remain the same, but the valuation base is extended by a quarter. Different valuation multiples are applied to segments like JLR, China JV, Passenger Vehicles (PV), and Commercial Vehicles (CV), considering their estimated sales, EBITDA, EBIT, and EPS for September 2025. These multiples are benchmarked against similar companies, with target multiples discounted by 20% for JLR and China JV, and 50% for CV and PV. The Electric Vehicle (EV) business valuation is based on the last funding round average with a 30% discount, and the target price remains unchanged.

You Searched For "EBIT margins" and got 11 results

Why has Bernstein called India’s EV sector 'irrelevant'?

BI India Bureau

Tata Motors rallies nearly 8% on strong JLR sales in March quarter; Analysts bullish with an eye on margins

Bhakti Makwana

Margin recovery likely an uphill task for Infosys after Q1 shock

Kritti Bhalla

2 Profit Margin Charts You Must Understand Before You Enter The Debate About Profit Margins

Sam Ro

Wall Street is bullish on Amazon earnings despite uncertainty around consumer spending, rising investment costs

Filip De Mott

Things aren't looking great at Gucci, and Kering says its APAC slump is to blame

Aditi Bharade

4 ways Europe's Airbus is faring better than Boeing

Pete Syme

'Valuation looks increasingly unsustainable': Here's how Wall Street is reacting to Tesla's third-quarter earnings miss

Matthew Fox

Critics roasted LVMH for spending big on Tiffany. 4 years later, the bet doesn't look so bad.

Madeline Berg

Mid-tier IT companies expected to outperform the big guns

Katya Naidu

PV sales to shift gears courtesy festive season but 2-wheelers’ struggles to continue

BI India Bureau

Popular Keywords

Buying Guides