Tata Motors Shares: Q3 results reports 22% decline in net profit

Tata Motors Shares: Q3 results reports 22% decline in net profit


Hit by a fall in domestic demand, Tata Motors reported a sharp 22 per cent decline in its Q3 consolidated net profit and revenue rose a tepid 2.7 per cent mainly due to its subsidiary Jaguar Land Rover, which is also seeing weakness in demand in China.

Subdued domestic demand weighed on the company, whose standalone revenue dropped 8.8 per cent while profit plunged 69 per cent in the quarter. Passenger vehicle volumes saw an uptick of 1.1 per cent at 1,40,000 units, lagging industry growth of 4.5 per cent while the commercial vehicle volumes saw a 1 per cent decline.

“The overall demand in Q3 is not as expected. The festive season was healthy but after that, the demand was impacted. Tight liquidity is one of the factors. However, we expect underlying domestic demand to improve gradually on account of infrastructure spending, product launches and stable interest rates,” said PB Balaji, Group Chief Financial Officer of Tata Motors, on a media call.

Consolidated EBITDA margin shrank to 13.7 per cent from 14.3 per cent year ago. The company reported cash flow of ₹4,700 crore in the quarter and the net automotive debt reduced to ₹19,200 crore.

In the near term, the automobile maker expects the passenger industry to report moderate growth in FY25 with strong growth in the SUV segment, and emission-friendly power trains while the commercial vehicle industry will see a demand uptick in Q4 FY25. On JLR, the company mentioned with a challenging economic backdrop, it will remain watchful of the demand situation in China and globally for JLR.

For its passenger and electric vehicles, the company expects sequential rise in wholesales in the current quarter, on the back of lower channel inventories and festivities in March.

During the quarter, it recognised ₹351 crore as benefits from PLI.

Passenger Vehicles

Passenger vehicles during the quarter saw a 7.8 per cent EBIT margin owing to cost reduction actions and incentives more than offsetting adverse realisation. The passenger vehicle inventory was reduced to less than 30 days during the quarter.

“In Q3 FY25, we recorded wholesales of 1,40,000 units (1.1 per cent growth over Q3 FY24) and retail sales growth of 6 per cent over Q3FY24. This has allowed us to sharply reduce our channel inventory ahead of Q4 FY25,” said Shailesh Chandra, Managing Director of TMPV and TPEM.

Tata Motors electric vehicle market share stood at 61 per cent while the penetration was at 11 per cent and CNG penetration was at 24 per cent in YTD FY25.

“While inflation is not a concern right now, we are anticipating the liquidity to be in a better position and stable interest rates,” said PB Balaji.

The commercial vehicle business saw a marginal drop in domestic wholesales with 91,100 units in Q3 against 91,900 units in Q3FY24.

JLR performance

Tata Motors marque brand Jaguar and Land Rover saw volumes up 3 per cent sequentially and a fifth on year. A breakdown of the sales number across brands showed that Range Rover, Range Rover Sport and Defender accounted for 70 per cent of total wholesales. Demand was brisk in the UK, North America and Europe but was offset by demand weakness in China.

JLR’s revenue edged up 1.5 per cent at £7.5 billion with an EBITDA margin of 14.2 per cent. The company stated that during the quarter, JLR delivered the highest EBIT margin in a decade and a ninth successive profitable quarter.

JLR reported a cash balance of £3.5 billion. The revenue was up by 1.5 per cent a £7.5 billion.

The net debt was at £1.1 billion with gross debt of £4.6 billion.

“The retail conditions in China are under stress with the premium market down by 14 per cent year-on-year. We are watchful of the demand situation in the market and globally for JLR. The JLR volumes in Q4 will be higher,” added PB Balaji.

Its key priorities in the coming quarters would be to proactively drive demand, becoming net debt free and launch more products.





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