Tata Motors Q3 net profit doubles to Rs7,100 cr

Mumbai: Tata Motors Ltd on Friday reported a 133.32 per cent rise in net profit to Rs7,100 crore for the December 2023 quarter. The company had posted a net profit of Rs3,043 crore in the year-ago period, its first profit in two years. The consolidated revenue increased 25 per cent year-on-year to Rs1,10,600 crore in the third quarter of the current fiscal, the company said in a statement.

The company said EBITDA (earnings before interest, taxes, depreciation and amortisation) rose 320 bps to 14.3 per cent during the December quarter, while improved wholesales and reduced material costs resulted in EBIT margins of 8.8 per cent (+510 bps). The net debt was reduced further by Rs9,500 crore to Rs29,200 crore, the company said, adding that it is on track to deleveraging targets. EBIT margin in Q3 FY24 was more than double year-on-year to 8.8 per cent. Its revenue from commercial vehicle sales improved by 19.2 per cent to Rs20,100 crore while EBIT increased to 8.6 per cent, benefiting from higher realisations and richer mix, Tata Motors said.

In Q3 FY24, domestic wholesale CV volumes were 91.9K units, marginally higher by 1.1 per cent year-on-year, while exports increased 14 per cent to 4.8K units. The passenger vehicle revenues rose 10.6 per cent to Rs12,900 crore, and EBIT margins improved by 60 bps to 2.1 per cent, led by savings in commodity costs, the company said. PV volumes grew 5 per cent to 138.6K units, supported by a strong supply situation, new SUV facelifts, and a robust demand during the festive period, it added. “We remain positive on all three auto businesses. We expect the performance to further improve in Q4 (March quarter) on account of seasonality, new launches and improving supplies at JLR. “We achieved net debt reduction of Rs9,500 crore in the December quarter, and we are confident of achieving our deleveraging plans,” Tata Motors said in a statement. “It is satisfying to see our businesses execute well on their differentiated strategies and deliver a strong set of results for the quarter, thereby making it six quarters of consistent delivery,” Tata Motors Group Chief Financial Officer PB Balaji said.

JLR delivered another strong performance in Q3 FY24, increasing wholesales to fulfil more client orders in the quarter, Tata Motors said. JLR revenue for the quarter was 7.4 billion pounds, up 22 per cent year-on-year.

EBIT margin was positive at 8.8 per cent, more than double from 3.7 per cent a year ago, the company said, adding the higher profitability reflects favourable volumes and reduced chip costs, offset partially by unfavourable fixed marketing, administration and FX revaluation. JLR is on track to achieve its profitability and cash flow targets. The EBIT margin for FY24 is likely to be over 8 per cent, and we continue to expect operating cash flow to support net debt of less than 1 billion pounds by the end of FY24 and positive net cash in FY25, according to the statement.

“We have delivered a further outstanding financial performance in quarter three, with our best quarterly profit for seven years and our highest ever revenue for the first nine months of a financial year,” said T Adrian Mardell, JLR Chief Executive Officer. Sales of modern luxury vehicles hit new records in the quarter, and the company is excited about the strong client interest in soon-to-launch Range Rover Electric, he added. “Looking ahead, we are mindful of the challenges our business will face but are confident that we will continue to successfully deliver our Reimagine Strategy,” Mardell said.