Tata Motors Q1 profit jumps 74% to ₹5,566 crore

Tata Motors Ltd reported a 74% year-on-year increase in its net profit at ₹5,566 crore for the quarter ended June 30, 2024 compared with ₹3,203 crore in the same quarter last year.

Revenue from operations rose 5.7% year-on-year to ₹107,316 crore for the first quarter compared to ₹101,528 crore in the corresponding quarter last year.

Revenues from its luxury car unit JLR grew 5.4% to 7.3 billion pounds while EBITDA fell 50 basis points to 15.8%. The U.K. subsidiary’s net debt was at 1 billion pounds with gross debt at 4.8 billion pounds.

The board of Tata Motors also approved the demerger of passenger vehicles and commercial vehicles businesses into two separate listed companies. This is expected to conclude in the next 12 to 15 months. The merger of Tata Motors Finance with Tata Capital is also underway and expected to conclude over the course of next 9 to 12 months.

Tata Motors cautioned that global demand is likely to remain muted. “We expect gradual improvement in domestic demand during the rest of the year on account of continued investments in infrastructure, healthy monsoons, favourable macros and festive demand,” the automaker says.

“The first quarter has carried forward the momentum of last year with all businesses continuing to deliver on their distinctive strategies. We are confident of sustaining the performance in the coming quarters and delivering a strong year,” says PB Balaji, group chief financial officer, Tata Motors.

Tata Motors says it is likely to witness constrained production in Q2 and Q3 reflecting the annual summer plant shutdown and floods at a key aluminum supplier.

“JLR has delivered an outstanding set of results in the first quarter, with record revenues and an increase in year-on-year quarterly profits of nearly 60%,” says JLR CEO Adrian Mardell.

“We are bringing the lessons learned from this success on the racetrack to our luxury electric vehicles and later this year we will unveil our first next generation luxury electric vehicle, Range Rover Electric, which has more than 41,000 customers on its waiting list,” Mardell adds.

While heavy commercial vehicle demand held up well, market sentiment remained positive in MCV segment with demand increasing in e-commerce, auto-aggregates and LPG segments. The volumes were up by 5.7% majorly driven by medium and heavy commercial vehicles. The revenues improved by 5.1%.

“The forecast of a healthy monsoon, expectations of policy continuity and continuing thrust on infra related developmental projects by the Government are expected to improve the demand for commercial vehicles. The demand in staff, intercity, and stage carriage segments should also remain healthy despite the seasonal dip often seen in school transportation in Q2 FY25. We will continue to drive our demand-pull strategy and drive customer preference through innovation, service quality and thematic brand activation. The business will continue to focus on strong EBITDA delivery, higher ROCE and unlocking value through downstream businesses,” the automaker says.