Tata Motors Q1 FY25 results: Net profit jumps 74% to Rs 5,566 crore | Company Results

The company’s EBIT came in at Rs 9,100 crore, with an EBIT margin of 8.4 per cent, which was up 30 basis points. Jaguar Land Rover (JLR) revenues increased by 5.4 per cent to 7.3 billion pounds, with EBIT margins of 8.9 per cent (up 30 basis points), driven by favorable volume, mix, and material cost improvements.

Commercial vehicle (CV) revenues increased by 5.1 per cent to Rs 17,800 crore and EBIT margins improved to 8.9 per cent (up 240 basis points) benefiting from better realizations and material cost savings.

Passenger vehicle (PV) revenues decreased by 7.7 per cent, reflecting the challenging market conditions, but the EBITDA margin at 5.8 per cent was driven by material cost reductions.

The company said that global demand is likely to remain muted and it expects gradual improvement in domestic demand during the rest of the year due to continued investments in infrastructure, healthy monsoons, favorable macroeconomic conditions, and festive demand. Commodities are likely to remain range-bound, Tata Motors said.

PB Balaji, Group Chief Financial Officer, Tata Motors, said: “The first quarter has carried forward the momentum of last year with all businesses continuing to deliver on their distinctive strategies. We are confident of sustaining the performance in the coming quarters and delivering a strong year.”

The PV wholesales in Q1 FY25 were down 1.1 per cent, while electric vehicle (EV) volumes (at 16,600 units) were down sharply by 13.9 per cent due to a sharp decline in the fleet segment. EV penetration is steady at 12 per cent, while CNG penetration has increased substantially from 16 per cent in FY24 to 22 per cent in Q1 FY25.

Tata Motors Vahan registration market share held at 13.7 per cent in Q1 FY25, and it enjoys an EV market share of 67 per cent.

Tata Motors expects PV demand to pick up during the festive season, and new product launches to boost the business.

“Our focus is to increase the addressable market by introducing new nameplates, strengthen the multipowertrain strategy to leverage industry powertrain shifts, and proactively grow the EV market in India while maintaining market leadership. “We will work towards enhancing profitability through scale benefits, improving mix, and optimization of cost and capital expenditure,” it noted.

Shailesh Chandra, Managing Director TMPV and TPEM, said: “The passenger vehicle industry in Q1 FY25 witnessed retails (registrations) moderating, impacted by the general elections and intense heat waves across the country. Tata Motors’ sales of 138,682 cars and SUVs were slightly lower compared to Q1 FY24, as we proactively readjusted our wholesales in line with retails to keep channel inventory under control.”

Chandra added that while the personal segment retails have grown for EVs, there was a sharp decline observed in the fleet segment.

In the CV segment, wholesales have grown 5.7 per cent to 93,700 units in Q1 FY25 – domestic volumes increased 6.7 per cent whereas exports remained flat. Vahan market share in the Indian market was at 39 per cent in Q1 FY25, as the company’s market share continued to strengthen in medium and heavy CVs.

The forecast of a healthy monsoon, expectations of policy continuity, and continuing thrust on infrastructure-related developmental projects by the government are expected to improve the demand for commercial vehicles. “The demand in staff, intercity, and stage carriage segments should also remain healthy despite the seasonal dip often seen in school transportation in Q2 FY25,” it said.

Girish Wagh, Executive Director Tata Motors Ltd, said: “Q1 FY25 registered a positive start for the Indian commercial vehicles sector. Tata Motors recorded commercial vehicles domestic sales of 87,615 units, around 7 per cent higher than Q1 FY24 sales. Overall positive market sentiment arising from increased economic activity, continuing infrastructure development, and growing demand of e-commerce, auto aggregates, and LPG segments led to sales improving across most segments – HCV, MCV, and CV Passenger.”

JLR free cashflow for the quarter was 230 million pounds. Its net debt was at 1 billion dollars and gross debt was 4.8 billion dollars. JLR posted its best ever Q1 revenue at 7.3 billion pounds, up 5 per cent YoY. Profit before taxes and exceptional items in Q1 FY25 was £693 million, up from £435 million a year ago. “The higher profitability year-on-year reflects favorable volume, mix and material cost improvements, offset partially by increased marketing spend compared to a year ago,” Tata Motors said.

In the second and third quarters, JLR will have constrained production due to annual summer plant shutdown and floods at a key aluminum supplier.

Adrian Mardell, JLR Chief Executive Officer, said: “Thanks to the hard work and commitment of our people, JLR has delivered an outstanding set of results in the first quarter, with record revenues and an increase in year-on-year quarterly profits of “nearly 60 per cent.”

First Published: Aug 01 2024 | 6:38 PM IST