Tata Motors’ profit zooms by 137% in Q3

Indian automaker Tata Motors reported a 137 per cent increase in its net profit with ₹7,025 crore in Q3 compared with ₹2,957 crore reported during the same quarter last year.

The company registered an 86.6 per cent increase in profit compared with ₹3,764 crore in the September quarter.

The revenue from operations registered a 25 per cent growth with ₹1,10,577 crore for the December quarter compared with ₹88,488 crore reported during the same quarter last year. A 5.18 per cent growth was reported during the quarter compared with ₹1,05,128 crore reported in September. The company’s consolidated automotive debt was reduced to ₹29,200 crore.

The company’s board of directors appointed Sitaram Kandi as the Chief Human Resource Officer as Ravindra Kumar GP stepped down. Kumar GP will take up a role with another Tata group company.

“It is satisfying to see our businesses execute well on their differentiated strategies and deliver a strong set of results for the quarter, thereby making it six quarters of consistent delivery. We aim to end the year on a strong footing and remain confident of sustaining our performance in the coming quarters and delivering on our de-leveraging plans,” said PL Balaji, Group Chief Financial Officer, Tata Motors

Tata Motors had a cash flow of ₹6,400 crore in Q3.

“Q3 FY24 was a strong quarter for the PV industry with robust festive sales. However, coming off a high base, the industry recorded a single-digit growth at an overall level while the sales of EV and CNG-powered vehicles grew over 90 per cent and 25 per cent respectively, signalling a growing preference for green and smart technologies by customers. Tata Motors recorded wholesales of 138.5K units (up 5 per cent vs Q3 FY23) with a strong focus on retails resulting in a significant rise in Vahan registrations for Q3 FY24 (up~14 per cent vs Q3 FY23 and ~24 per cent vs Q2FY24). EV sales grew 21 per cent vs Q3 FY23 (domestic + IB) and CNG grew by a substantial 214 per cent. New avatars of the Nexon (ICE & EV), Harrier Safari and our EV offering Punch.ev received excellent responses from the customers. The business continued to improve financial performance and EV business (excluding R&D spends) was EBITDA breakeven. Going forward, we will remain agile and are optimistic about continuing the growth trend in the quarters ahead,” said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd.

EV business

The company’s EV penetration increased to 12 per cent during the quarter. The quarter saw the highest-ever sales the company said. The company’s CNG penetration stood at 14 per cent during the quarter.

The electric vehicle penetration is expected to go up to 25 to 30 per cent by FY25/

During the quarter, the company signed an MoU with electric vehicle charging point operators and Bharat Petroleum for setting up more than 17,000 chargers in the next 1 year.

The commercial vehicle business saw a revenue of ₹20,100 crore during the quarter and the domestic wholesale business saw a marginal uptick by 1.1 per cent at 91,900 units.

Tata Motors is not planning to further raise money for its electric vehicle business and the company stated that the PLI benefit should soon start coming in.

“The revenue for PLI is between 13 to 15 per cent. We are in the final stages of filing for PLI, there are a lot of procedures and steps that a manufacturer has to adhere to. We expect to complete and start filing by Q4,” said PL Balaji.

JLR performance

Tata Motor’s JLR reported the highest free cash flow ever of £626 million.

JLR revenue was up by 22 per cent at £7.4 billion in Q3. The net debt for JLR was reduced to £1.6 billion. The company stated the higher profitability year-on-year reflects favourable volumes and reduced chip costs, offset partially by unfavourable fixed marketing, administration and FX revaluation. The Range Rover Electric, that is yet to be introduced has received 15,000 waiting list sign-ups.

“We have delivered a further outstanding financial performance in quarter three, with our best quarterly profit for seven years and our highest-ever revenue for the first nine months of a financial year. Sales of our modern luxury vehicles hit new records in the quarter,” said Adrian Mardell, Chief Executive Officer of JLR.

Red Sea & price hike

The company stated that the Red Sea crisis has had only a marginal impact with a delay in supply between 7 to 10 days. It does not expect any further cost to the company.

Stating that inflationary pressures are low, the company does not plan to undertake any major price hikes.

“There is no concern as such for inflationary pressures. The price hikes could be residual and owing to new technology that will be required to install in vehicles,” added PB Balaji.

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