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Tata Motors Q3 results: Net profit down 22% on muted revenue growth

Revenues of commercial and passenger vehicles were down 8.4% and 4.3%, respectively

Tata Motors

Sohini Das Mumbai

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Passenger and commercial vehicle major Tata Motors on Wednesday posted a 22.4 per cent year-on-year (Y-o-Y) decline in net profit to Rs 5,451 crore for the third quarter of FY25 on muted revenue growth of 2.7 per cent to Rs 1,13,575 crore.
 
Sequentially, however, the numbers look better for the auto major, which recently hiked prices of commercial and electric vehicles to offset inflation, with net profit jumping 63 per cent and revenue increasing 12 per cent.
 
PB Balaji, Group CFO of Tata Motors, told reporters that they were on track to deliver a strong performance for FY25, despite external challenges. Tata Motors stock went up 3.2 per cent on the BSE on Wednesday. The company results missed the Bloomberg analysts’ estimates - revenue was 3 per cent and profit 15 per cent below estimates. 
 
 
Tata Motors' luxury vehicle arm Jaguar Land Rover (JLR) is facing challenges of demand growth in markets like China, and the company is in a wait-and-watch mode to assess the impact of President Donald Trump’s tariff policies, which threatens to impose higher taxes on imports to the US.
 
JLR delivered a strong quarter with record quarterly revenue of 7.5 billion pounds (up 1.5 per cent) with a profit before taxes and exceptional items (PBT bei) of 523 million pounds (down 103 million pounds). This was the ninth consecutive profitable quarter for JLR and it has a cash balance of 3.5 billion pounds.
 
“While JLR wholesales are expected to improve further in Q4FY25, we remain watchful on the overall demand situation, particularly in China,” Tata Motors said.
 
Commercial vehicle (CV) revenues declined 8.4 per cent to Rs 1,8431 crore while Ebitda margins 
 
improved to 12.4 per cent (up 130 bps) due to material cost saving and the impact of production linked incentive (PLI) incentive. Passenger vehicle (PV) revenues were also down 4.3 per cent to Rs 12,354 crore, however, Ebitda margin was up by 120 bps at 7.8 per cent due to cost controls and PLI incentive.
 
The company received the sanction of Automotive PLI in December 2024. Accordingly, an income of Rs 351 crore has been recognised. 
 
Tata Motors said it expected the underlying domestic demand to improve gradually on account of infrastructure spending, and a slew of exciting product launches and stable interest rates.
 
“In Q3, the performance of all businesses improved sequentially....The fundamentals of the business are strong and therefore despite external challenges we are confident of delivering another strong performance this year,” Balaji said.
 
JLR has continued to do better than the industry in China. Some retailers there have run into financial stress, and once this situation gets better, then they expect better growth, he added.
 
Looking ahead, JLR is on track to achieve profitability and cash flow targets of FY25 and expects an Ebit margin of over 8.5 per cent and positive net cash. Balaji said that Q4 was traditionally a strong quarter.
 
As far as the PV business is concerned, the volumes were flat at 140,000 units during the quarter. The Vahan registration market year-till-date is 13.3 per cent and the EV market share is 61 per cent.
 
 “In Q3FY25, we recorded wholesales of 140,000 units (1.1 per cent growth over Q3FY24) and retail sales growth of 6 per cent over Q3FY24. This has allowed us to sharply reduce our channel inventory ahead of Q4FY25,” said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles (TMPV) and Tata Passenger Electric Mobility (TPEM).
 
He added that in the EV segment, they registered 19 per cent growth in the domestic personal segment, although the fleet volumes declined Y-o-Y due to the expiry of the FAME II subsidy.
 
Currently, EV penetration is at 11 per cent of Tata Motors’ portfolio, CNG at 24 per cent in YTD FY25. The Punch sold over 200,000 units to emerge as the highest-selling car model in India in CY24.
 
In the CV business, Tata Motors’ domestic Vahan market share came in at 37.7 per cent for YTD FY25. Its popular product Ace EV volumes grew 26 per cent during the quarter with the launch of a new value proposition in the post-FAME2 incentives scenario. More than 50 product variants were introduced in Q3FY25.  Overall, CV wholesales stood at 91,100 units, slightly lower Y-o-Y, but significantly better than 79,800 units in Q2FY25.
 
Tata Motors expects demand to improve in Q4FY25 across most segments. “The key aspects to watch out for in 2025 will be the government's focus on infrastructure spends, and growth in end-use segments, which will augur well for the commercial vehicles industry,” the company said.
 
“In Q3FY25, the HCV segment witnessed robust sequential recovery, even as the Y-o-Y sales declined 9 per cent due to limited growth in end-use segments. The ILMCV segment and passenger carrier segment witnessed 3 per cent and 30 per cent Y-o-Y growth, whereas the SCV segment experienced a marginal decline due to ongoing financing challenges,” said Girish Wagh, Executive Director, Tata Motors.
 
Waiting for clarity on car exports from UK to US
 
PB Balaji, Group CFO of Tata Motors said they were waiting for clarity on the impact of US President Donald Trump’s tariff policies on the import of cars to the US. The UK's balance of payments is the other way round with the US, he said, adding that when it came to manufactured goods, the US did not have a trade deficit with the UK. Balaji also said that the currency movements (pound devaluation) may help Tata Motors. “We will have to keep a watch on the cost side and demand side,” he said.
 
UK business secretary Jonathan Reynolds recently said that the country should be excluded from Trump's threat to impose tariffs on exports to the US. Reynolds told the BBC that the US had no goods trade deficit with the UK, which occurs when a country imports more than it exports. 
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First Published: Jan 29 2025 | 8:24 PM IST

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