Tata Motors, India's leading electric vehicle manufacturer, anticipates a sluggish start to FY25, citing an expected dip in local passenger vehicle (PV) demand amidst ongoing elections.
"We see that the industry will moderate and grow less than 5 percent, given that the pent-up demand has exhausted, the channel inventory is high and in the first quarter, we will face certain factors like that of elections to dampen the demand for temporary for quarter one," Shailesh Chandra, managing director of Tata Motors' passenger vehicle said in a post-result earnings call.
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Despite the subdued outlook for overall passenger vehicle demand, Tata Motors says that the premium luxury segment is poised to maintain resilience. In April, PV sales inched up by a modest 4 percent month-on-month to reach 3,35,123 units, as per data from the Federation of Automobile Dealers Associations (FADA).
However, persistent challenges such as competition, surplus supply, and aggressive discounting pose hurdles for sustained growth, FADA said.
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The company's wholly-owned subsidiary, Jaguar Land Rover (JLR), reported another stellar quarter. JLR's revenue soared to 7.9 billion pounds, marking an 11 percent increase compared to Q4 FY23 and a six percent rise compared to Q3 FY24. Moreover, JLR's revenues for the entire FY24 reached 29.0 billion pounds, reflecting a 27 percent surge compared to the previous year. The British subsidiary foresees its earnings before interest and taxes (EBIT) margins in fiscal 2025 to be about 8.5 percent, similar to the previous fiscal.
The company also announced on May 10 that it has been testing the upcoming electric Range Rover in extreme conditions in the Arctic Circle and Middle Eastern deserts and plans to launch the electric version later this year. The waitlist for the electric Range Rover opened in December last year, and JLR claims it already has over 28,700 sign-ups for the model.
In the fourth quarter, Tata Motors posted a massive 222 percent growth in its consolidated net profit at Rs 17,407.18 crore riding on improved operating leverage, favourable commodity prices and strong volume growth across segments.
Tata Motors shares closed nearly 2 percent higher to Rs 1,046 on May 10, extending gains for the second trading session in a row. In 2023, the stock was the best performer on the NSE Nifty, giving a return of over 100 percent.
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