Tata Motors Q3 profit drops 22% YoY to Rs 5,451 crore, hit by weaker margins, JLR slowdown; misses estimate

Tata Motors Q3 FY25 Results

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Tata Motors Ltd reported a 22 percent year-on-year drop in consolidated net profit to Rs 5,451 crore for the third quarter of FY25, missing analyst estimates. The automaker’s performance was weighed down by weaker margins and subdued Jaguar Land Rover (JLR) volumes, despite a sequential improvement.

Revenue from operations rose 2.7 percent on-year to Rs 1,13,575 crore, driven by a modest improvement in overall sales. However, earnings before interest, tax, depreciation, and amortisation (EBITDA) margins fell 60 basis points year-on-year to 13.7 percent. Earnings before interest and tax (EBIT) stood at Rs 10,000 crore, reflecting an improvement of 60 basis points.

Tata Motors' stock closed 3.3 percent higher at Rs 752.5 on the NSE ahead of the Q3 results announcement.

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Tata Motors Q3 segmental performance

Jaguar Land Rover (JLR): The luxury vehicle subsidiary delivered record quarterly revenue at GBP 7.5 billion, marking a 1.5 percent increase from the previous year. EBIT margin stood at 9 percent, the highest in a decade, although EBITDA margin contracted 200 basis points to 14.2 percent. JLR’s profit before tax (before exceptional items) stood at GBP 523 million, lower than the GBP 627 million recorded a year ago. The company cited supply chain improvements as a key factor in sequential growth but remained cautious about demand, particularly in China.

Commercial Vehicles (CV): Revenue for the segment fell 8.4 percent on-year to Rs 18,431 crore due to weaker volumes and an unfavourable product mix. However, EBITDA margins improved to 12.4 percent, up 130 basis points, aided by material cost savings and benefits from the government’s Production Linked Incentive (PLI) scheme.

Passenger Vehicles (PV): The segment recorded a 4.3 percent decline in revenue to Rs 12,354 crore. Despite this, EBITDA margin improved by 120 basis points to 7.8 percent, helped by cost-cutting measures and PLI incentives. The company’s electric vehicle (EV) sales in the personal segment rose 19 percent on-year, though fleet sales were impacted by the expiry of FAME II subsidies.

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Tata Motors said its profit before tax (before exceptional items) fell marginally to Rs 7,700 crore, down Rs 75 crore from the year-ago period. Automotive free cash flow stood at Rs 4,700 crore, driven by improved volumes; and finance costs shrunk by Rs 760 crore to Rs 1,725 crore, reflecting a reduction in gross debt.

Outlook

Tata Motors said in its statement that it expects demand to improve gradually, supported by infrastructure investments, upcoming product launches, and stable interest rates. JLR’s wholesale volumes are projected to improve further in the fourth quarter, though the company remains cautious about overall demand trends, particularly in China.

“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,” said PB Balaji, Group CFO, Tata Motors.

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