Tata Motors has reported a consolidated net profit of Rs 3,203 crore for the first quarter of the fiscal year 2023-24, marking a significant upturn driven by robust sales in its luxury vehicle unit, Jaguar Land Rover (JLR), and an improved margin in its passenger vehicle (PV) business. The Q1 revenue from operations exhibited an impressive 42% year-on-year surge, reaching Rs 1.02 lakh crore, outpacing estimates of Rs 99,887 crore.
The auto giant’s earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a fivefold year-on-year increase to Rs 13,218 crore, indicating a stellar operational performance. Additionally, operating margins expanded by 700 basis points to 14.4%, significantly influenced by the robust performance of JLR and strong PV and commercial vehicle businesses in India.
JLR’s revenue rose by 57% year-on-year in the quarter to £6.9 billion, with a pre-tax profit of £435 million, a stark contrast to the loss recorded in the previous year. The impressive profitability growth was attributed to favourable volume, mix, pricing, and foreign exchange revaluation, offset partially by increased inflation and supplier claims.
With the order book remaining strong at 185,000 units and the free cash flows in the quarter reaching £451 million, the highest ever for the period, JLR appears to be in a healthy financial position. The strong start to the financial year led to an increase in cash in hand to £4 billion and a reduction in net debt to £2.5 billion as of June-end.
However, the commercial vehicle business painted a mixed picture. While revenue saw a modest growth of 4.4% to Rs 17,000 crore, domestic wholesale and retail sales declined by 14.4% year-on-year. Moreover, exports saw a sharp 32% year-on-year drop due to subdued economic conditions in overseas markets.
On the brighter side, the PV segment reported an 11% growth in revenue, driven by improved pricing. Domestic wholesale sales grew 7.6% year-on-year in the quarter, and retail sales grew 6%. Electric vehicle volumes remained strong, recording a high of over 19,000 units.
Tata Motors expects demand to sequentially improve in the coming quarters. The shares of Tata Motors closed 1.6% higher on the National Stock Exchange at Rs 639.45, scaling a lifetime high of Rs 642.50 during intraday trading.
After the results were declared, the company also announced of their plans of delisting Tata Motors DVR shares in next 12 to 15 months. For those holding 10 Tata Motors DVR shares will receive 7 Tata Motors shares, once the delisting takes place.
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