Earnings Outlook
Fall in India sales to dent Tata Motors' revenue growth
This story was originally published at 20:53 IST on 7 May 2025
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By Anand JC
MUMBAI – Tata Motors Ltd. is expected to post low single-digit revenue growth for the March quarter on the back of a decline in domestic wholesale sales. A potentially sharper fall in its top line could be limited by robust growth in despatches in its Jaguar Land Rover business, according to analysts. The company will disclose its earnings on May 13.
The Mumbai-based automotive giant is expected to report a consolidated net profit of INR 72.0 billion for the March quarter, sharply down from INR 174.1 billion a year ago, according to an average of estimates from 12 brokerages. The company had reported a sharply higher profit in the year-ago quarter due to a deferred tax credit of INR 87.8 billion.
Estimates on the Safari maker's bottom line vary from INR 54.8 billion by JM Financial Institutional Securities to INR 83.6 billion by Motilal Oswal Financial Services.
The company's revenue for the March quarter is expected to grow 1.8% on year to INR 1.221 trillion, according to the average of estimates. Sequentially, the top line is seen growing 7.5%.
Tata Motors' earnings before interest, taxes, depreciation, and amortisation for the March quarter is expected to be INR 161.2 billion, down 10% on year but up 3.8% sequentially, according to the average of estimates from 11 brokerages.
MUTED SALES
The recently concluded year was frustrating for automobile companies because of moderating local demand, even though exports continued to grow. Tata Motors sold 252,642 units to dealerships in the March quarter, down 5% from a year ago.
In contrast, listed passenger vehicle companies posted a 3% on-year growth in volumes, primarily driven by robust demand for utility vehicles. Mahindra & Mahindra Ltd. and Toyota Kirloskar Motor Pvt. Ltd. gained market share at the expense of Tata Motors during the reporting quarter, analysts said.
The contraction in Tata Motors' standalone business volumes is expected to be offset by the robust performance of Jaguar Land Rover. Wholesale volumes of Jaguar Land Rover business in the March quarter increased 1.1% on year to 111,413 units. Sequentially, despatches grew 7%.
In the March quarter, JLR volumes grew in North American and European markets, remained flat in the UK and fell in China. JLR ended FY25 net cash positive, Nomura Research said.
Tata Motors despatched 99,764 commercial vehicles in India in the latest quarter, down 5% on year. It sold 146,127 passenger vehicles to dealerships, registering a 6% on year fall. Exports, however, grew 31% on year to 6,751 units, benefiting from a lower base.
Tata Motors offered discounts to deal with increased inventory at dealerships and revive demand. Tata Motors' passenger vehicle retail sales grew 7% in the March quarter due to higher discounting towards the end of March, Equirus Securities said.
The company's discounts and marketing drive led to a pick-up in sales, but will impact its March quarter EBITDA margin, according to Prabhudas Lilladher. Tata Motors had reported a consolidated EBITDA margin of 14.3% a year ago and 11.5% in the December quarter. Elara Securities expects Tata Motors' consolidated EBITDA margin for the reporting quarter to be 13.1%. Kotak Institutional Equities expects the EBITDA margin to improve 90 basis points on year, driven by commodity tailwinds and a richer product mix.
JLR BUSINESS
Analysts expect Jaguar Land Rover to report a mild revenue growth for the March quarter amid low global demand. A weaker Chinese economy and a shift in consumer preference towards electric vehicles have impacted sales of luxury car makers such as JLR.
ICICI Securities and Kotak expect JLR business to report a revenue growth of 2% on year in the March quarter. JLR's average selling price is expected to remain largely unchanged year-on-year for the reporting quarter as benefits from a richer product mix would be offset by an increase in discounts and marketing spends, analysts said. The company is expected to have benefited from a higher mix of Range Rover, Range Rover Sport and Defender models in the March quarter, Kotak said.
The outlook for Tata Motors' JLR business is currently highly uncertain due to the imposition of tariffs by the US, which contributes 30% to JLR's overall volumes and has been the strongest growth driver for JLR. "This could have a disproportionate impact on profitability and cash flows," HSBC Global Research said in a note.
Wednesday, Tata Motors' shares ended at INR 680.3 on the National Stock Exchange, up 5%. Tata Motors disclosed its December quarter earnings on Jan. 29 post-market hours. Since then, its share prices have fallen roughly 10%.
Following are the Jan-Mar earnings estimates for Tata Motors Ltd. based on reports from 12 brokerage firms in descending order by the estimate of net profit:
Brokerage Name | Net revenue (in INR mln) | Net profit (in INR mln) | EBITDA (in INR mln) |
Motilal Oswal Financial Services Ltd | 12,62,761.00 | 83,603.00 | 1,71,952.00 |
Kotak Institutional Equities | 12,09,329.00 | 79,827.00 | 1,61,102.00 |
Elara Securities (India) Pvt Ltd | 12,14,283.00 | 78,487.00 | 1,58,464.00 |
Nuvama Wealth Management Ltd | 12,04,545.00 | 76,813.00 | 1,60,019.00 |
HSBC Global Research | 12,26,075.00 | 75,056.00 | 1,63,531.00 |
Prabhudas Lilladher Pvt Ltd | 12,78,609.00 | 72,128.00 | 1,85,981.00 |
HDFC Securities Ltd | 12,19,962.00 | 72,109.00 | |
Nomura Equity Research | 11,99,665.00 | 70,681.00 | 1,45,825.00 |
Emkay Global Financial Services Ltd | 12,17,865.00 | 69,297.00 | 1,47,097.00 |
KR Choksey Research | 12,34,097.00 | 67,231.00 | 1,65,270.00 |
ICICI Securities Ltd | 11,90,777.00 | 63,882.00 | 1,47,223.00 |
JM Financial Institutional Securities Pvt Ltd | 11,97,929.00 | 54,826.00 | 1,66,296.00 |
Average | 12,21,324.75 | 71,995.00 | 1,61,160.00 |
End
Edited by Saji George Titus
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