Jobaaj Stories
Tata Motors has reported a 22% drop in its consolidated net profit for the third quarter of FY25, with earnings standing at Rs 5,451 crore, missing analysts' expectations. This decline was primarily due to weaker profit margins and a slowdown in the performance of its luxury vehicle brand, Jaguar Land Rover (JLR), even though there was a slight improvement from the previous quarter.
Revenue from operations increased by 2.7% compared to the same period last year, reaching Rs 1,13,575 crore, supported by moderate growth in overall sales. However, the company’s profit margins, measured by earnings before interest, tax, depreciation, and amortisation (EBITDA), decreased by 60 basis points to 13.7%. On a positive note, Tata Motors’ earnings before interest and tax (EBIT) showed an improvement, rising by 60 basis points to Rs 10,000 crore.
Ahead of the results, Tata Motors' stock rose by 3.3%, closing at Rs 752.5 on the NSE.
Jaguar Land Rover Performance
The luxury vehicle division, Jaguar Land Rover (JLR), achieved record quarterly revenue of GBP 7.5 billion, up by 1.5% from last year. However, its profit before tax (before exceptional items) decreased to GBP 523 million, down from GBP 627 million in the same quarter last year. The company cited improvements in its supply chain as a key driver for sequential growth but expressed caution about future demand, particularly in China.
JLR’s EBITDA margin fell by 200 basis points to 14.2%, though its EBIT margin rose to 9%, the highest in a decade.
Commercial and Passenger Vehicle Performance
Tata Motors’ commercial vehicles segment saw a decline in revenue by 8.4%, dropping to Rs 18,431 crore. This was due to weaker sales and a less favorable product mix. However, the segment’s EBITDA margin improved to 12.4%, up by 130 basis points, thanks to cost savings and government incentives.
In the passenger vehicle segment, revenue fell by 4.3%, standing at Rs 12,354 crore. Despite this, the EBITDA margin improved by 120 basis points to 7.8%, aided by cost-reduction measures and government incentives. The company’s electric vehicle (EV) sales in the personal segment grew by 19% compared to last year, although fleet sales were impacted by the expiration of subsidies under the FAME II scheme.
Other Key Figures
The company’s profit before tax (excluding exceptional items) fell slightly to Rs 7,700 crore, a drop of Rs 75 crore compared to the same period last year. Tata Motors’ automotive free cash flow reached Rs 4,700 crore, driven by stronger volumes. Finance costs also decreased by Rs 760 crore to Rs 1,725 crore, reflecting a reduction in the company’s gross debt.
Outlook
Tata Motors expects demand to improve gradually in the coming quarters, supported by ongoing infrastructure investments, new product launches, and stable interest rates. JLR’s wholesale volumes are also expected to grow in the fourth quarter, although the company remains cautious about demand trends, particularly in China.
PB Balaji, Group CFO of Tata Motors, said, “We delivered sequential improvement across all businesses in Q3. Our fundamentals remain strong, and despite external challenges, we are confident of delivering another strong performance this year.”
