Tata Motors reports profit of Rs 3,203 crore in Q1 on strong demand for Jaguar Land Rover

The country's largest automaker by revenue and parent of luxury car maker Jaguar Land Rover, Tata Motors, on Tuesday, July 25, reported the third consecutive quarterly profit helped by price hikes and strong demand for cars in its luxury segment.

The company posted a consolidated net profit of Rs 3,203 crore for the April to June quarter, compared with a loss of Rs 5,007 crore a year before and beating analyst estimates who had pegged the company to report a profit of Rs 2,900 crore.

Tata Motors' revenue from operations rose 42.5 per cent to Rs 1,01,528 crore from Rs 71,228 crore in the year-ago period.

Operating performance 

Its EBITDA also known as operating profit came in at Rs 14,700 crore up 177 per cent year-on-year (Y-o-y) and EBIT of Rs 8,300 crore all showing a sharp improvement driven by Jaguar Land Rover (JLR) and commercial vehicle businesses whilst the passenger vehicle business was steady, the company said in a regulatory filing.

JLR revenues improved by 57 per cent to £6.9 billion on strong wholesales and an improved mix resulting in EBIT margins of 8.6 per cent.

"We remain optimistic about the demand situation despite near-term uncertainties and expect a moderate inflationary environment to continue in the near term. We aim to deliver a strong performance in the rest of the year too, thanks to a healthy order book coupled with low-break-even in JLR, a steady improvement in demand whilst we continue to drive our demand-pull strategy in CV, a set of exciting launches ahead of the festive season in PV and continued aggression in EVs," 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 in the rest of the year and achieving our stated goals,” said PB Balaji, Group chief financial officer, Tata Motors.

Jaguar Land Rover Q1 performance

• Revenues in Q1 FY24 of £6.9 billion, up 57 per cent (Y-O-Y)
• Profit before tax at £435 million, up nearly £1 billion from Q1 FY23
• EBIT margin in the quarter was 8.6% per cent, up from 6.5 per cent in Q4 FY23.
• The higher profitability year-on-year reflects favourable volume, mix, pricing and foreign exchange revaluation offset partially by higher inflation and supplier claims.
• Free cash flows (FCF) of £451 million, the highest JLR Q1 cash flow on record; cumulative FCF over the last three quarters is £1.8 billion.
• Cash on hand increased to £4 billion and net debt was reduced to £2.5 billion at June 30, 2023.
• Order book strong at 185,000 units with Range Rover, Range Rover Sport and Defender representing 76 per cent of the order book.

“I am pleased to report a third consecutive quarter of strengthening financial performance for JLR. 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. This is a testament to the thousands of determined people in the business working tirelessly to deliver every aspect of our Reimagine strategy,” said Adrian Mardell, JLR Chief Executive Officer.

Tata Motors passenger vehicle (PV) business continued to witness robust demand in first quarter of current financial year. The PV volumes grew to 14,004 units (up 7.7 per cent Y-o-Y). Revenues grew by 11.1 per cent to Rs 12,800 crore driven by improved pricing. The EBITDA margins were lower by 80 bps Y-o-Y at 5.3 per cent, impacted by higher mix of EV’s and higher fixed expenses. The EV profitability is likely to improve second half onwards, the company saids.