Informist, Tuesday, May 13, 2025

By Anand JC and Ashutosh Pati

MUMBAI – Tata Motors Ltd.'s consolidated bottom line for the March quarter beat consensus view despite higher tax expenses and a one-time loss. At the group level, the company's automotive business became debt-free as of Mar. 31, but it warned of tariffs and related geopolitical actions making operating environment uncertain and challenging.

The Nexon maker reported a consolidated net profit of INR 84.7 billion for the reporting quarter, down 51% on year, but much higher than analysts' estimate of INR 72 billion. Its revenue from operations for the period was INR 1.195 trillion, largely unchanged from a year ago, but lower than expectations of INR 1.221 trillion. Its UK-based luxury car business Jaguar Land Rover, which contributes a little over 70% to its overall revenue, reported a revenue of 7.7 billion pound sterling, down 1.7% on year.

The company sold 99,600 commercial vehicles in India in the March quarter, down 4.8% on year, while passenger vehicle sales fell 5.5% on year to 147,000 units. Poor sales performance is reflected in these segments' earnings. Revenues from commercial vehicles in the March quarter were INR 214.9 billion, down slightly on year. Its passenger vehicle segment earned a revenue of INR 125.4 billion, down 13% on year. Commercial vehicles and passenger vehicles each contribute roughly 18% and 11%, respectively, to the company's top line.

With the automotive business now debt-free, Tata Motors expects lower interest costs going ahead. "Lower depreciation and amortisation at JLR (Jaguar Land Rover), better CV (commercial vehicle) profitability and savings in interest cost were partially offset by lower volumes and lower operating leverage," the company said in a press release. As of Mar. 31, the company had a net cash balance of INR 10 billion.

Tata Motors' EBITDA in the March quarter fell 4.1% on year to INR 167 billion. The company reported a 60 bps fall in the consolidated EBITDA margin to 14% in the reporting quarter.

JAGUAR LAND ROVER

JLR, the largest unit of Tata Motors, was profitable for the 10th successive quarter, reporting an over 32% rise in profit before tax to 875 million pound sterling in the March quarter. JLR reported the best yearly profit before tax in a decade at 2.5 billion pound sterling in FY25. Its profit before tax was up 15% on year. The company attributed the increase in profit to higher volumes and a reduction in depreciation and amortisation.

The luxury carmaker's EBIT margin rose 150 bps from the year ago period to 10.7% for the reporting quarter while the EBITDA margin contracted 100 bps to 15.3%. In FY25, it reported a revenue of 29 billion pound sterling, with an EBIT margin of 8.5% and an EBITDA margin of 14.3%.

The company expects its investment spend to remain at 18 billion pound sterling over a five-year period, which will be funded by operational cash flows. The company said the reduction in US trade tariffs on the UK auto exports has brought greater certainty to the sector and the company will protect EBIT through delivery of transformation and efficiency initiatives. "JLR has ended the year with strong annual and quarterly earnings, including delivering our tenth consecutive profitable quarter and our net debt zero target. We have achieved record sales of Defender, revealed the stunning Jaguar Type 00 and we are preparing to launch the wonderful Range Rover Electric," said Adrian Mardell, JLR chief executive officer.

COMMERCIAL VEHICLES

Lower volumes dragged the revenue of the commercial vehicles segment by 0.5% on year to INR 214.9 billion. Tata Motors reported a 20 bps rise in the EBITDA margin to 12.2%, and the EBIT margin rose 10 bps to 9.7%.

Even though the commercial vehicles segment saw a near 5?ll in revenue to INR 75.1 billion in FY25, it reported the highest ever profit of INR 66 billion in the year. The company launched more than 44 products and 139 variants in the year. "With most macroeconomic indicators on track, improved fleet utilisation and stable sentiment index, we anticipate sustained growth despite global headwinds. We will continue to closely monitor government infrastructure spending and growth across key end-use segments," the company said in a press release. The company will be focussed on ensuring the smooth transition of AC regulation in trucks, coupled with value enhancements.

PASSENGER VEHICLES

The passenger vehicles segment did not fare much better with revenue falling over 13% on year to INR 125.43 billion in the reporting quarter. This segment reported a 130-bps fall on year in EBIT margin to 1.6%, impacted by lower volumes and realisations. However, the EBITDA margin for this segment for the March quarter rose 60 bps to 7.9%.

The passenger vehicle segment reported a profit before tax of INR 11 billion in FY25. The segment's revenue in FY25 was INR 484 billion, down 7.5% on year. An increase in depreciation and amortisation lead to a 110 bps decline in EBIT margin to 0.9% in FY25. The EBITDA margin for the year rose 40 bps to 6.9%. Sports utility vehicles, compressed natural gas vehicles, and electric vehicles will remain the key growth drivers for the company.

Tata Motors reported a one-time cost of INR 5.66 billion in the March quarter. The company's finance costs fell by INR 25.1 billion to INR 50.83 billion in FY25 due to a reduction in gross debt during the period. Its net profit from joint ventures and associate companies amounted to INR 2.88 billion in FY25, down from INR 7 billion in FY24. The company's other income, excluding grants and other deferral income, was INR 27.69 billion in FY25. Free cash flow for the year was at INR 224 billion, down from INR 269 billion in FY24 due to cash profits and favourable working capital.

In FY25, the company's consolidated net profit fell to INR 278.30 billion from INR 313.99 billion a year ago. Its consolidated revenue in the year was INR 4.397 trillion.

The company will pay INR-6-per share final dividend to its shareholders. On Tuesday, shares of Tata Motors closed 1.8% lower at INR 707.7 on the National Stock Exchange. The company released its results after the market closed. End

Edited by Akul Nishant Akhoury

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