Mumbai, February 2, 2024: Tata Motors Ltd. (TML) announced its results for the quarter ending December 31, 2023.
Tata Motors Consolidated: TML delivered a strong performance in Q3 FY24 with revenue of Rs.110.6K Cr (up 25.0%), EBITDA at Rs.15.8K Cr (up 60.6%) and EBIT of Rs.9.2K Cr (+Rs.5.3K Cr) with all automotive verticals continuing their profitable growth trajectory. PBT (bei) improved by Rs.4.4K Cr to Rs.7.6K Cr and net profit was Rs.7.1K Cr. For YTD FY24, the business reported strong PBT (bei) of Rs.19.0K Cr, an improvement of Rs.22.6K Cr over the previous year. Net automotive debt reduced further to Rs.29.2K Cr.
JLR revenue improved 22% to £7.4b. Improved wholesales and reduced material costs resulted in EBIT margins of 8.8% (+510 bps). CV revenue improved by 19.2%, and EBIT improved to 8.6% (+270 bps) benefiting from higher realisations and richer mix. PV revenues were up by 10.6%, and EBIT margins improved by 60 bps to 2.1% led by savings in commodity costs.
Looking Ahead: We remain positive on all three auto businesses. We expect the performance to further improve in Q4 on account of seasonality, new launches, and improving supplies at JLR. We achieved a net debt reduction of Rs.9.5K Cr in Q3 and we are confident of achieving our deleveraging plans.
PB Balaji, Group Chief Financial Officer, Tata Motors, said: “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. We aim to end the year on a strong footing and remain confident of sustaining our performance in the coming quarters and delivering on our de-leveraging plans.”
Highlights
Reimagine Transformation Modern Luxury
Electrification
Sustainability
Financials JLR delivered another strong performance in Q3 FY24, increasing wholesales to fulfil more client orders in the quarter. Revenue for the quarter was £7.4 billion, up 22% versus Q3 FY23 and up 8% versus Q2 FY24. Revenues for YTD FY24 were £21.1 billion - JLR’s highest ever revenue in the first nine months of a financial year and up 35% yoy. EBIT margin was positive at 8.8%, more than doubling from 3.7% a year ago. The higher profitability yoy reflects favourable volumes and reduced chip costs, offset partially by unfavourable fixed marketing, administration and FX revaluation.
Looking ahead The Company is on track to achieve its profitability and cashflow targets. The EBIT margin for FY24 is expected to be over 8% and we continue to expect operating cashflow to support net debt of less than £1 billion by the end of FY24 and positive net cash in FY25.
Adrian Mardell, JLR Chief Executive Officer, said: “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. Sales of our modern luxury vehicles hit new records in the quarter and we are excited about the strong client interest for our soon to launch Range Rover Electric. I must attribute these results to our talented and dedicated people, who work relentlessly to bring our exceptional modern luxury cars to the market. 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.”
Financials In Q3 FY24, domestic wholesale CV volumes were 91.9K units, marginally higher 1.1% yoy. Exports were at 4.8K units increasing by 14% yoy. However, revenues improved by 19.2% yoy to Rs.20.1K Cr on account of salience towards medium and heavy commercial vehicles and better market operating price. The quarter witnessed strong EBITDA and EBIT margins of 11.1% (up 270 bps yoy) and 8.6% (up 270 bps yoy) respectively, due to improved pricing, superior mix, and strong realizations leading to a strong PBT (bei) of Rs.1.7K Cr.
Looking ahead Going forward, we expect demand to improve in Q4FY24 across most segments due to the Government’s continuing thrust on infrastructure development, the promising growth outlook of the economy and our demand-pull initiatives. We will continue to improve realizations whilst growing VAHAN share, drive innovation to address specific micro segment needs, focus on market development and scale up EV penetration. Focused actions are underway to win back the market share in SCVPUs. Profitability continues to remain the key focus area and we will strive to ensure consistent margin improvement and delivery of double-digit EBITDA margins.
Girish Wagh, Executive Director Tata Motors Ltd said: “The CV industry witnessed a pause in sales growth in Q3FY24 on account of the higher base effect, impact of elections held across five states, and the post festive seasonal slowdown in rural consumption. While M&HCV and Passenger Commercial segments witnessed healthy growth, shrinking IL&CV and SCVPU sales pulled down overall volumes during the quarter. Owing to pricing discipline and richer mix, profitability continued to improve and we achieved 11.1% EBITDA margins in Q3 FY24. We will continue to drive the business with strong customer connect, proactive demand-pull initiatives and with innovations in product and service. By improving customer affinity for our brands, we intend to further step-up registration market shares sustainably, and improve realisations and profitability.”
Financials PV volumes were at 138.6K units (+5% yoy) supported by a strong supply situation, new SUV facelifts, and a robust demand during the festive period. Revenues were up 10.6% yoy at Rs. 12.9K Cr. EBIT margins improved by 60 bps yoy to 2.1% on account of cost savings in commodities, offsetting higher fixed expense spends. On a standalone basis, in Q3 PV (ICE) EBITDA margins were at 9.4% (+20 bps qoq). EV business EBITDA margins pre R&D spends was near breakeven.
Looking ahead We continue to see healthy growth for our business with multiple new products scheduled for launch in CY2024. The recently launched Punch.ev has garnered strong interest and will scale up EV volumes further. We successfully retooled Sanand facility in the shortest span of 12 months, taking it to a new level to accommodate a wide range of existing products and future new models to come. We continue to strengthen the EV ecosystem through exclusive TATA.ev stores and are accelerating the charging infrastructure and recently signed MoUs to set-up 17,000+ public chargers. We remain focused to achieve double digit EBITDA margins in PV, grow margins in EV and deliver market beating growth.
Shailesh Chandra, Managing Director TMPV and TPEM said: “Q3 FY24 was a strong quarter for the PV industry with robust festive sales. However, coming off a high base, the industry recorded a single digit growth at an overall level while the sales of EV and CNG powered vehicles grew over 90% and 25% respectively, signaling a growing preference for green and smart technologies by customers. Tata Motors recorded wholesales of 138.5K units (up 5% vs Q3 FY23) with a strong focus on retails resulting in a significant rise in Vahan registrations for Q3 FY24 (up~14% vs Q3 FY23 and ~24% vs Q2FY24). EV sales grew 21% vs Q3 FY23 (domestic + IB) and CNG grew by a substantial 214%. New avatars of the Nexon (ICE & EV), Harrier and Safari and our EV offering Punch.ev received excellent response from the customers. The business continued to improve financial performance and EV business (excluding R&D spends) was EBITDA breakeven. Going forward, we will remain agile and are optimistic about continuing the growth trend in the quarters ahead.”
(Consolidated Numbers, Ind AS)
FINANCE COSTS Finance costs reduced by Rs.191 Cr to Rs.2,485 Cr in Q3 FY24, due to reduction in gross debt during the period.
JOINT VENTURES, ASSOCIATES AND OTHER INCOME For Q3 FY24, net profit from joint ventures and associates amounted to Rs.193 Cr compared with a profit of Rs.103 Cr in Q3 FY23. Other income (excluding grants) was Rs.752 Cr in Q3 FY24 versus Rs.455 Cr in Q3 FY23.
FREE CASH FLOWS Free cash flow (automotive) for Q3 FY24, was positive at Rs.6.4K Cr driven by strong improvement in cash profits. Net automotive debt reduced to Rs.29.2K Cr.
