Tata Motors Q1 Results: Automaker swings back into profit of Rs 3,203 crore on JLR boost

Tata Motors, on July 25, swung back into the black with a consolidated net profit of Rs 3,203 crore for the first quarter of fiscal year 2023-24 (Q1 FY14), boosted by the improved margin of its passenger vehicle (PV) business and robust sales at its luxury car unit, Jaguar Land Rover (JLR).

The automobile manufacturing company had reported a net loss of Rs 5,006.60 crore in Q1 FY23 on revenues of Rs 71,934.66 crore.

Revenue from operations increased 42 percent to Rs 1.02 lakh crore in the quarter under review. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter stood at Rs 14,700 crore, up 177 per cent.

P.B. Balaji, Group Chief Financial Officer, Tata Motors, said, "FY24 has begun on the right note with all automotive verticals delivering strong performances. The distinct strategy employed by each business is now delivering consistent results and making them structurally stronger. We remain confident of sustaining this momentum for the rest of the year and achieving our stated goals."

JLR revenues improved by 57 per cent to £6.9 billion on strong wholesales and an improved mix, resulting in earnings before interest and taxes (EBIT) margins of 8.6 per cent (+1,300 basis points or bps). Commercial vehicle (CV) volumes were lower by 15 per cent over the prior year due to the transition to BS6 Phase 2.

However, the EBIT margins improved to 6.5 percent (+370 bps), benefiting from the demand-pull strategy and a richer mix. PV business was steady with 11.1 percent revenue growth and EBIT of 1.0 percent (+10 bps). Overall profit before tax (PBT) improved by Rs 10,300 crore to Rs 5,300 crore and net profit was Rs 3,300 crore.

Tata Motors also revealed that its free cash flow (automotive) for the June quarter was positive at Rs 2,500 crore, driven by a strong improvement in cash profits. As a result, its net automotive debt got reduced to Rs 41,700 crore, the company maintained.

Earlier, Tata Motors revealed that its global wholesales numbers, including JLR, increased 5 percent year-on-year (YoY) to 3,22,159 vehicles in Q1 FY24. Of that, PV sales had risen 8 percent on-year to 140,450 units.

The company’s JLR wholesales for the quarter stood at 10,324 and 82,929 vehicles, respectively. Together, the luxury arms clocked 93,253 units, a 30 percent jump over the same quarter a year ago.

Adrian Mardell, JLR Chief Executive Officer (CEO), said, "We have had a strong start to the financial year and delivered our highest production levels in nine quarters and our highest Q1 cash flow on record."

The company’s profit beats the average of the estimates of five brokers pegged it at Rs 2,546 crore.

Tata Motors said it remains optimistic about the demand situation despite near-term uncertainties and expects a moderate inflationary environment to continue in the near term.

The homegrown automaker said it aims to deliver a "strong performance" in the rest of the year too, thanks to a "healthy order book" coupled with low breakeven in JLR, a steady improvement in demand while it continues to drive demand-pull strategy in CVs, a set of exciting launches ahead of the festive season in PVs, and continued aggression in EVs.

Meanwhile, the Tata Motors’ scrip, on July 25, closed 1.62 percent higher at Rs 639.45 apiece on BSE.