Tata Motors Ltd. has announced its financial results for the first quarter ending June 30, 2024, showcasing robust performance across its business segments despite challenging market conditions. The company also outlined its strategic initiatives, including the demerger of its Commercial Vehicle (CV) business and the merger of Tata Motors Passenger Vehicles (TMPV) with the existing listed company, leading to the formation of two distinct listed entities.
Financial Highlights:
- Consolidated Revenue: ₹108,048 crore, up 5.7% year-on-year.
- EBITDA: ₹15,600 crore, reflecting a 6.0% increase.
- Profit Before Tax (bei): ₹8,828 crore, an improvement of ₹3,287 crore.
- Auto Free Cash Flow: ₹1,200 crore, a decrease of ₹1,300 crore.
Segment Performance:
- Jaguar Land Rover (JLR):
- Revenue: £7.3 billion, up 5.4% year-on-year.
- EBITDA Margin: 15.8%, down 50 basis points.
- EBIT Margin: 8.9%, up 30 basis points.
- PBT (bei): £693 million, up 59%.
- Free Cash Flow: £230 million.
- Tata Commercial Vehicles (Tata CV):
- Revenue: ₹17,849 crore, up 5.1%.
- EBITDA Margin: 11.6%, up 220 basis points.
- EBIT Margin: 8.9%, up 240 basis points.
- PBT (bei): ₹1,535 crore, up ₹598 crore.
- Tata Passenger Vehicles (Tata PV):
- Revenue: ₹11,847 crore, down 7.7%.
- EBITDA Margin: 5.8%, up 50 basis points.
- EBIT Margin: 0.3%, down 70 basis points.
- PBT (bei): ₹173 crore, down ₹13 crore.
Strategic Initiatives:
- Demerger and Merger:
- Tata Motors Ltd. will demerge its CV business into a separate entity, TMLCV.
- TMPV will merge into TML, resulting in two distinct listed entities focusing on CV and PV businesses respectively.
- Shareholders of Tata Motors Ltd. will receive one share of TMLCV for each share held.
- Corporate Actions:
- The merger of Tata Motors Finance with Tata Capital is underway, expected to conclude in 9-12 months.
- The process of canceling DVR and issuing ORD shares is expected to complete in about two months.
- These actions are subject to necessary approvals from shareholders, creditors, and regulators.
Outlook:
- Global demand is expected to remain muted, with gradual improvement anticipated in domestic demand due to investments in infrastructure, favorable monsoons, and festive demand.
- Commodities are likely to remain range-bound.
Leadership Commentary: PB Balaji, Group Chief Financial Officer, Tata Motors, commented, “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.”
Adrian Mardell, CEO of JLR, highlighted the strong performance and future prospects, “Thanks to the hard work and commitment of our people, 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 per cent. We are making great progress delivering our Reimagine strategy.”
Girish Wagh, Executive Director, Tata Motors Ltd., emphasized the positive market sentiment and future expectations for the CV sector, “Overall positive market sentiment arising from increased economic activity, continuing infrastructure development, and growing demand of e-commerce, auto aggregates and LPG segments led to sales improving across most segments.”
Shailesh Chandra, Managing Director TMPV and TPEM, expressed optimism for the PV sector despite current challenges, “Going forward, we expect an improvement in overall sales on the back of the onset of the festive season and the launch of Curvv, India’s first SUV Coupe.”
Tata Motors continues to drive forward with its strategic initiatives and strong financial performance, positioning itself for sustained growth and enhanced shareholder value in the coming quarters.
