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

The revenue from operations for the April-June quarter was up 5.7 per cent to Rs 107,316 crore

Mumbai-based automaker Tata Motors has rung up a 74 per cent year-on-year rise in consolidated profit after tax (PAT) for the first quarter of 2024-25 to Rs 5,566 crore, up from the Rs 3,203 crore in the same quarter last year.

Revenues from operations for the April-June quarter were up 5.7 per cent to more than Rs 1.07 trillion.

Tata Motors beat Street estimates. Brokerages had expected profit to come in around Rs 5,100 crore.

Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Motors Electric Mobility, said: “The passenger vehicle industry in Q1FY25 witnessed retails (registrations) moderating, impacted by the general elections and intense heatwaves across the country. Tata Motors’ sales of 138,682 cars and SUVs were slightly lower than in Q1FY24, as we proactively readjusted our wholesales in line with retails to keep channel inventory under control.”

 

The stock was down 1 per cent on the BSE on Thursday to Rs 1,144.6.

 

The company’s earnings before interest and tax (Ebit) came in at Rs 9,100 crore, with the Ebit margin of 8.4 per cent, which was up 30 basis points.

Revenues from Jaguar Land Rover (JLR) grew 5.4 per cent to £7.3 billion, with the Ebit margins of 8.9 per cent (up 30 basis points), driven by favourable volumes, and mix and material cost improvements.

Revenues from commercial vehicles grew 5.1 per cent to Rs 17,800 crore and the Ebit margins improved to 8.9 per cent (up 240 basis points), benefiting from better realisations and savings on material cost.

Revenues from passenger vehicles declined 7.7 per cent, reflecting the challenging market conditions, but the earnings before interest, tax, depreciation and amortisation margin at 5.8 per cent was driven by material cost reductions.

The company said global demand was likely to stay muted and it expected gradual improvement in domestic demand during the rest of the year due to continued investment in infrastructure, a healthy monsoon, festival demand, and other indicators. Prices of commodities are likely to remain range-bound, Tata Motors said.

P B Balaji, group chief financial officer, 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.” 

Passenger-vehicle (PV) wholesales in Q1FY25 were down 1.1 per cent, while electric-vehicle volumes (at 16,600 units) decreased sharply by 13.9 per cent due to a sharp decline in the fleet segment.

EV penetration is steady at 12 per cent, while compressed-natural-gas penetration has increased from 16 per cent in FY24 to 22 per cent in Q1FY25.

Board nod for demerger of businesses

Tata Motors’ Board on Thursday approved the demerger of commercial vehicle business into TML Commercial Vehicles and merging the passenger vehicle, electric vehicle and Jaguar Land Rover and related investments in the existing entity. Both would be created with mirror shareholding – one housing the CV business and the other amalgamated firm will house the PV, EV and JLR business. The share entitlement ratio will be 1:1 – shareholders of Tata Motors will have an identical shareholding in both listed entities.
 

“The scheme will further empower the respective businesses to pursue their differentiated strategies with greater agility and will enhance value for the shareholders,” the company said.
 

The transaction is subject to necessary shareholders, creditors and regulatory approvals which can take around 12-15 months to complete.
 

Tata Motors had announced the plan to demerge the CV and PV (and the JLR and EV) businesses on March 4.
 

As a part of the Scheme, TML will demerge its Commercial Vehicle undertaking involving the Commercial Vehicle business (all the assets, liabilities and employees relating to the Commercial vehicle business) and all its related investments into TML Commercial Vehicles Limited (TMLCV). Further, pursuant to the Scheme, the existing Passenger Vehicle business in Tata name.