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The Hindu
13-05-2025
- Automotive
- The Hindu
Tata Motors Q4 net halves, set to pay ₹6 in final dividend
Tata Motors Ltd. (TML) reported Q4 consolidated net profit plunged 52% to ₹8,470 crore from ₹17,528 crore in the year-earlier period which included deferred tax asset of ₹9,000 crore and exceptional item of ₹566 crore. Revenue remained flat at ₹1,18,927 crore. For FY25, the company's consolidated net profit fell 11% to ₹27,830 crore, while revenue grew by a marginal 1% to ₹4,36,821 crore. During the year, Tata Motors Group turned net auto cash positive with a net cash balance of ₹1,000 crore, the firm said. The board recommended a final dividend of ₹6 per share subject to approval by the shareholders. Lower depreciation and amortization at Jaguar Land Rover (JLR) unit, better profitability at the Commercial Vehicles division and savings in interest cost were partially offset by lower volumes and lower operating leverage, the company said. P.B. Balaji, Group Chief Financial Officer, Tata Motors said, 'Despite external headwinds, Tata Motors sustained its strong performance in FY25, delivering its highest ever revenues and PBT(bei). 'On a consolidated basis, the automotive business is now debt-free, reducing interest costs. This is both pleasing and significant as it reflects healthy business fundamentals delivered by a resilient team,' he said. 'Drawing strength from it, in this environment of heightened uncertainty, we will remain agile, proactively drive our growth agenda, reduce our cash breakeven further whilst continuing to invest in our future. With the shareholders also approving the demerger, we are on track to realise the full potential of each of the businesses,' he added. He said the tariffs and related geo-political actions were making the operating environment uncertain and challenging but the company would go ahead with the long term growth plans by continuing its investment. 'The global premium luxury segment and Indian domestic markets are expected to weather this [the challenges] relatively better. Drawing strength from our healthy business fundamentals, we remain focused on executing our growth strategy flawlessly, serving our customers better, and maintaining a heightened vigil on costs and cashflows whilst continuing to invest in our future,' Mr. Balaji said. He said the trade agreements between U.S. and U.K. as well as U.K. and India would benefit JLR, but did not quantify the gains. Mr. Balaji said the FTA between India and U.K. would see reduction in the prices of future models of JLR as the company as locally assembling most the of the existing models. 'FTA will benefit the future cars,' he said. On manufacturing in India, he said the company had taken a long-term view. Stating that the domestic EV business had been facing headwinds from the fleet segment, he said future line-ups like Harrier EV and Sierra EV would revive the overall EV segment. He said during the year, Tata Motors sold 65,000 EVs, which was 10% less than the previous year and the fall had been attributed to the lack of demand in the fleet segment. 'Growth was impacted by the fleet sales,' he said. He said the CV business performed well and reported improved profitability for the first time in 25 years. JLR continued its trend of consistent performance, delivering record full year and quarterly profits in a decade. Revenue for the quarter was £7.7 billion, down 1.7% YoY, while full year revenue at £29.0 billion was flat YoY. PBT (bei) in Q4 FY25 was £875 million, up from £661 million in Q4 FY24, and full-year profit before tax was £2.5 billion, up 15% YoY, and the best PBT in a decade. EBIT margin for the quarter was 10.7%, up 150 bps compared with Q4 FY24 and for the full year it was 8.5%, the best Q4 and full year EBIT margin in a decade. 'The increase in profitability year-on-year reflects higher volumes and a reduction in depreciation and amortisation (D&A),' the company said.
Mint
13-05-2025
- Automotive
- Mint
Tata Motors profit declines as JLR margins shrink on discounts; outlook clouded
Tata Motors Ltd reported a decline in annual net profit on Tuesday, as its British luxury car unit Jaguar Land Rover (JLR) faced margin pressures and the Indian automaker refrained from giving future guidance for the subsidiary citing global trade uncertainties fuelled by Trump tariffs. The country's largest passenger vehicle maker recorded a muted 1.3% growth in revenue to ₹ 4.39 trillion in FY25, as sales fell before interest, taxes, depreciation, and amortization, or Ebitda, margin fell 100 basis points to 13.1% due to a decline in margins of JLR owing to higher discounts. As a result, net profit for the full year fell 11% to ₹ 28,100 crore, from ₹ 31,800 crore in FY24. Tata Motors' Q4 revenue edged up 0.4% to ₹ 1.19 trillion, but profit more than halved to ₹ 8,600 crore. This sharp profit drop is partly due to a prior-year accounting boost: in January-March of 2024, Tata Motors recognized an ₹ 8,300 crore deferred tax asset, inflating that quarter's profit. The current quarter reflects a return to normal accounting. 'In this challenging environment, Tata Motors was able to deliver highest-ever revenue and profit before tax (business earnings in India). The automotive business has also become net debt free,' P.B. Balaji, group chief financial officer at Tata Motors said in a post-results media briefing. Tata Motors' shares settled 1.8% lower at ₹ 707.90 apiece on BSE on Tuesday. Jaguar Land Rover's FY25 revenue was steady at £28.9 billion, accounting for about 69% of Tata Motors' overall revenue. The British firm's Ebitda margin also declined by 160 basis points to 14.3% during the year. "A major concern for the company would be international challenges but a positive is the fact that JLR continues to be profitable. Domestically, the company has to watch out for rising competition eating into its market share," Saji John, senior research analyst at Geojit Financial Services, said. Tata Motors acquired the British luxury car brand for $2.3 billion in 2008. There are still some details which need to be clarified before we are able to give the exact picture on impact on Jaguar Land Rover The British brand has had to deal with a tough environment as tensions flared up between the United States and other countries as the Trump administration imposed 25% import tariffs. The company will partly benefit from the US-UK trade agreement, which brings down tariffs to 10% from the current 25%. However, the rate still remains higher than 2.5% tariffs auto imports attracted before. Slowdown in sales of Tata Motors was visible in the decline in volumes globally. The firm's investor presentation showed that global sales declined 3% to 366,000 units in the January-March period. The company believes that the global premium luxury segment and Indian domestic markets will be able to withstand the uncertainties. 'Demand in the United Kingdom is expected to pick up further. The outlook for Europe is also looking better,' Balaji said during the call. However, the company shied away from giving the exact outlook on the impact of global headwinds on Jaguar Land Rover as the situation is still evolving. However, the management maintained that there will be no changes to investment plans for the year ahead 'There are still some details which need to be clarified before we are able to give the exact picture on impact on Jaguar Land Rover,' Balaji told reporters. Jaguar Land Rover, which gets about one fourth of its sales from the North American region, paused shipments to the region in April. The exports since then have resumed but the impact on its revenue and profit remains unclear. On the domestic front, the passenger vehicle division of Tata Motors recorded a 7.5% decline in revenue to ₹ 48,445 crore in FY25 amid a 3% fall in total sales to 556,263 cars. Similarly, the commercial vehicle segment also recorded a 4.7% fall in revenue to ₹ 75,053 crore.
