On the back of a record FY24 performance, Tata Motors has earmarked Rs 43,000 crore in financial year 2025 for product development and advanced technologies. The decision comes with the semiconductor crisis easing off and expected sustenance in demand for both UK-based subsidiary Jaguar Land Rover (JLR) and standalone business.
A senior company official told reporters that during FY 2024-25, investment will be to the tune of 35,000 crore (3.5 billion pounds) for JLR unit and around Rs 8,000 crore will be spent for Tata Motors’ standalone business.
“The 3.5 billion investment in JLR is about 6 percent increase (from FY24). In the current year this was about 3.3 (billion pounds). The investment in Tata Motors will be broadly around the same (Rs) 8,000 crore range (spent last year). So, both will get similar investments compared to this year," P.B. Balaji, Group Chief Financial Officer, Tata Motors told reporters in a post earnings conference call.
He clarified that the investments will be largely made on building products and platforms, rather than output expansion or on debottlenecking of existing capacities.
“For FY 25, JLR will take about Rs 3.5 billion and all the product plans that have are all coming together next year. There is a phase-in issue of the years we are dealing with and the products have to be launched on time. And Tata Motors will repeat the Rs 8,000 odd crore range (of outlay) that we are on to. So JLR is about 6 percent increase and Tata Motors is about flat.”
He went on to add, “Both JLR and Tata Motors are about products and technologies. Debottlenecking of capacity is incidental to the whole process.”
Last year, the company had spent around Rs 41,200 crore, which was enhanced due to higher deployment towards JLR business.
“We had earlier given a guidance for an investment of 3 billion (pounds) in JLR and about (Rs) 8,000 crore in Tata Motors. That is about Rs 38,000 crore that was earmarked for FY 24. At JLR, we ended up with an an investment of 3.3 billion (pounds)- and Tata Motors we did about Rs 8,000 crore,” explained Balaji.
However, he clarified it will be an "investment" and not “a capex”, which will be added into its Profit & Loss (P&L) account as well as its balance sheet. “So total investment we have ended up with is Rs 41,200 crore (during FY 24),” he said.
Balaji also stated that Tata Motors is keeping its options open regarding incentives under India's new EV policy and manufacturing decisions for its subsidiary Jaguar Land Rover (JLR).
Meanwhile, JLR's revenue for the quarter stood at 7.9 billion pounds, marking an 11 per cent surge compared to Q4 FY23 and a six per cent rise compared to Q3 FY24. Furthermore, JLR's revenues for FY24 reached 29.0 billion pounds, a 27 per cent increase compared to the prior year.
Tata Motors said it expects JLR's earnings before interest and taxes (EBIT) margins in fiscal 2025 would be similar to the 8.5 percent it clocked in the previous fiscal year. JLR's earnings before interest and taxes (EBIT) margin came in at 9.2 percent for the quarter.
The Mumbai-based automaker is now shifting its focus in the EV market from early adopters to broader market development strategies. During an earnings call, Balaji emphasized Tata Motors' commitment to EV expansion and is gearing up to launch the Curvv EV as part of their strategy.
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