Tata Motor's Q4 Net Profit Jumps Over Three Fold; Revenue Up By 13%

Vehicle manufacturer, Tata Motors (TML) has reported record revenues of ₹437.9K Cr, an all-time high EBITDA at ₹62.8K Cr, highest ever PBT (bei) of ₹28.9K Cr (+₹27.1K Cr over the previous year) and net profit of ₹31.8K Cr (+₹29.1K Cr over the previous year) in the FY24. The strong performance has also helped to recognise a Deferred Tax Asset of ₹8.3K Cr at JLR and TML.

In Q4 FY24, TML delivered a strong performance with revenue of ₹120.0K Cr (up 13.3 per cent), EBITDA at ₹17.9K Cr (up 26.6 per cent) and EBIT of ₹11.0K Cr (+₹3.8K Cr) with all three auto businesses delivering a strong performance. PBT (bei) stood at ₹9.5K Cr (+₹4.4K Cr) and net profit was ₹17.5K Cr (+₹12.0K Cr). Net automotive debt reduced further to ₹16.0K Cr.  

Dividends:

The Board of Directors have recommended a final dividend of ₹ 3/- per Ordinary Share and ₹3.10 per A Ordinary Share and a special dividend of ₹ 3/- per Ordinary Share and ₹3.10 per A Ordinary Share subject to approval by the shareholders.

Looking Ahead:

Tata remain cautiously optimistic on domestic demand over the full year and expect H1 to be relatively weaker.​ The premium luxury segment demand is likely to remain resilient despite emerging concerns on overall demand. ​Despite this, they are confident of delivering a strong performance in FY25.

Commenting on the strong sales results, PB Balaji, Group Chief Financial Officer of Tata Motors, said “It is pleasing to report the FY24 results during which Tata Motors Group delivered its highest ever revenues, profits, and free cash flows. The India business is now debt free, and we are on track to become net automotive debt free on a consolidated basis in FY25. The businesses are executing well on their distinct strategies and therefore, we are confident of sustaining this strong performance in the coming years.”

JAGUAR LAND ROVER (JLR)

Highlights

• Record Q4 and FY24 revenue of £7.9 billion and £29.0 billion respectively.
• PBT (bei) was £661 million in Q4; FY24 full year PBT (bei) was £2.2 billion, the highest since FY15.
• EBIT margin in Q4 of 9.2 per cent, FY24 EBIT margin of 8.5 per cent.
• Free cashflow was £892 million for Q4 and a record £2.3 billion for FY24. Net debt reduced to £0.7 billion.
• Order book around 133,000 vehicles at end of FY24, 76 per cent of which were for RR, RR Sport and Defender.

Record Range Rover wholesale and retail sales for Q4 and FY24

• Range Rover Electric generating strong interest with over 28,700 sign ups to the waiting list
• Range Rover SV demand more than doubles to 4,099 units in FY24, including sale of 20 Range Rover SV Bespoke Sadaf editions which sold out at around £330,000 each.
• New Defender OCTA to be revealed on July 3, 2024 with prospective clients invited to one of seven exclusive events to experience the product.
• Investment of £356m in Electric Propulsion Manufacturing Centre in Wolverhampton, UK, installing equipment to manufacture battery packs and electric drive units.
• Launched three new JLR Insurance products to support UK clients, as part of JLR financial services offering.
• New Range Rover Electric and new Jaguar prototypes currently undergoing cold weather testing.
• Energy storage systems using second life Range Rover, Range Rover Sport PHEV and I-Pace batteries, developed.

Financials

JLR continued its strong financial performance trend in the financial year, with another record-breaking quarter in Q4 FY24. Revenue for the quarter was £7.9 billion, up 11 per cent versus Q4 FY23 and up 6 per cent versus Q3 FY24. Revenues for FY24 were £29.0 billion - JLR’s highest ever full year revenue and up 27 per cent compared to the prior year.

PBT (bei) in Q4 was £661 million (+£293 million yoy) and EBIT margin was 9.2 per cent in Q4, (+270bps yoy). The higher profitability yoy reflects increased volumes and reduced material costs, offset partially by increased marketing spend compared to a year ago. Profit after tax (“PAT”) in Q4 was £1.4 billion vs a profit of £259 million in the same quarter a year ago. PBT for FY24 was £2.2 billion – the highest since FY15; and PAT for FY24 was £2.6 billion. PAT also factors in the recognition of a deferred tax asset (DTA) of £1.0 billion due to a reassessment of future recoverability tax losses and allowances. 

Free cash flow for the quarter was £892 million and £2.3 billion for the full year, the highest ever full year cash flow. The year ended with a cash balance was £4.2 billion and net debt £0.7 billion and a total liquidity was £5.7 billion, including the £1.5 billion undrawn revolving credit facility maturing April 1, 2026.  

Looking ahead

We will continue to focus on brand activation to maintain order book. We expect EBIT margins in FY25 to be around the FY24 level. We anticipate a modest increase in investment spend to £3.5b but still expect to become net debt zero during FY25.

Adrian Mardell, JLR Chief Executive Officer, said “We have delivered a record financial performance for the company, generating free cashflow of £2.3 billion, enabling us to reduce net debt to £0.7 billion. The foundation of this performance was the sustained global demand for our modern luxury vehicles, led by our Range Rover and Defender brands, underpinned by a consistent focus on operational improvement. We are entering the next exciting phase of our Reimagine strategy which will see us bring to life our modern luxury electric vehicles and deliver an accompanying modern luxury experience for our clients, ensuring we continue to vigorously address the challenges we have encountered in 2024.” 

TATA COMMERCIAL VEHICLES (TATA CV)

Highlights

• Q4 FY24 revenue at ₹ 21.6K Cr (+1.6 per cent), EBITDA 12.0 per cent (+190 bps), EBIT 9.6 per cent (+100 bps), PBT (bei) ₹ 2.0K Cr.
• FY24 revenue at ₹ 78.8K Cr (+11.3 per cent), EBITDA 10.8 per cent (+340 bps), EBIT 8.2 per cent (+300 bps), PBT (bei) ₹ 6.1K Cr.
• Domestic Vahan market share at 39.1 per cent in FY24. HGV+HMV 48.8 per cent, MGV 37.5 per cent, LGV 34.3 per cent, Passenger 35.0 per cent. Truck market share continues to remain strong; SCV market share starting to improve.
• Over 140 products and 700 variants introduced in FY24. BS VI Phase 2 vehicle portfolio equipped with smarter technologies to deliver even better performance and value.
• Introduced technologically advanced, highly fuel efficient and reliable Turbotronn 2.0 engine, for 19-42 tonne range.
• Launched all-new Intra V70 pickup, Intra V20 Gold pickup and Ace HT. Introduced Tata Magic bi-fuel.
• Fleet edge, the connected vehicle platform has now more than 600K vehicles. 

Green Initiatives

• Showcased 10 CVs at Bharat Mobility Global Expo 2024, including Prima 5530.S LNG, industry first H2ICE truck, E-mobility concept tipper, Magna EV, Ace and Intra bi-fuel.
• Delivered green-fuel powered CV’s to Tata Steel. The fleet includes Prima tractors, tippers and the Ultra EV bus, powered by LNG and battery electric technologies.
• TCPL Green Energy Solutions inaugurated facility to produce Hydrogen based internal combustion engines.
• Unveiled 2 state-of-the-art facilities for development of Hydrogen propulsion technologies.
• Over 4300 ACE EV’s plying delivering 99 per cent uptime resulting in repeat purchases. Higher payload variant launched.
• 2600+ EV buses are operational. TML e-bus fleet cumulatively crossed 140 million Kms with >95 per cent uptime.

Financials

In Q4 FY24, domestic wholesale CV volumes were 104.6K units, lower 7 per cent YoY on account of increased pre-buy in Q4 FY23 due to BS6 Phase II transition. Exports were at 4.5K units increasing 13 per cent YoY.  However, revenues improved by 1.6 per cent YoY to ₹21.6K Cr on account of improved pricing and lower VME’s. EBITDA and EBIT margins of 12.0 per cent (up 190 bps yoy) and 9.6 per cent (up 100 bps yoy), respectively were delivered. For the full year, while overall volumes declined by 4 per cent, HCV volumes increased by 5 per cent. 

Looking ahead

With promising GDP growth outlook, incentives from government to improve productivity in both manufacturing and agriculture sectors, and continuing focus on infra, demand for CV’s is expected to improve from H2 FY25. The Company remains cautiously optimistic about domestic demand while keeping a close watch on geopolitical developments, interest rates, fuel prices and inflation. We will continue to deliver strong EBITDA performance and focus on net cash will continue.

Girish Wagh, Executive Director Tata Motors, said “The Indian CV industry grew by a modest 2 per cent in volumes during FY24, impacted by a high base effect of FY23, elections held across 5 states and the announcement of general elections. At Tata Motors, we strengthened our portfolio with the introduction of new passenger and cargo mobility solutions, stepped-up the thrust on digitalisation, enriched customer engagement and experience with stronger partnering and made holistic progress on our sustainability agenda. Our sharp focus on profitable growth resulted in the CV business recording its highest-ever revenues of ₹78.8K Cr and profits of ₹6.1K Cr in FY24. Going forward, we will intensify our efforts to grow market share, profitably and consistently, in every business segment by delivering more value to customers with innovative products, smarter services and holistic mobility solutions.”

TATA PASSENGER VEHICLES (TATA PV)

Highlights

• Q4 FY24 revenue at ₹ 14.4K Cr (+19.3 per cent), EBITDA 7.3 per cent (flat yoy), EBIT 2.9 per cent (+150 bps), PBT (bei) ₹ 0.5 K Cr.
• FY24 revenue at ₹ 52.4K Cr, (+9.4 per cent), EBITDA 6.5 per cent (+10 bps), EBIT 2.0 per cent (+100 bps), PBT (bei) ₹ 1.4 K Cr.
• VAHAN registration market share increased to 13.9 per cent in FY24. #2 player in H2 FY24 with 14.3 per cent market share.
• Strong market leadership in EV at 73.1 per cent despite increase in competition. EV penetration at 13 per cent, CNG at 16 per cent in FY24.
• Introduced twin cylinder iCNG technology in Tiago, Tigor, Punch, and Altroz enabling no compromise on boot space.
• Introduced AMT in its CNG cars.
• New Nexon, Safari and Harrier received GNCAP 5-star rating for both adult and child occupant protection. New Safari and Harrier secured highest score by an Indian Car in GNCAP and also became first recipients of BNCAP's 5-star rating.
• Commenced production at its state-of-the-art new facility in Sanand, Gujarat.

Green initiatives taken in FY24

• Range of Nexon.ev extended to 465 km.
• TPEM introduced new brand identity “Tata.ev” for the EV business, embodying the core philosophy of "Move with Meaning," unifying the values of sustainability, community, and technology.
• Announced platform-sharing partnership with JLR to accelerate development of ‘premium electric’ series ‘Avinya’.
• Introduced advanced Pure EV architecture – acti.ev which will underpin future products from the TPEM portfolio.
• Introduced first car “Punch.ev” on the acti.ev architecture.
• Inaugurated exclusive TATA.ev stores in Gurugram.
• Signed MoUs with charging point operators and OMC’s for setting up 22,000+ chargers in next 12-18 months

Financials

In Q4, PV volumes were at 155.6K units (+14.8 per cent YoY) supported by new SUV facelifts and multiple power trains. Nexon continued to be the highest selling SUV in FY24 and along with the Punch was amongst top 5 models sold in India. Revenues in Q4 were up 19 per cent yoy at ₹ 14.4K Cr, while EBIT margins improved by 150 bps yoy to 2.9 per cent owing to operating leverage on improved volumes and savings in commodity costs. In Q4, PV (ICE) business delivered double digit EBITDA margins and EV business was EBITDA positive (before R&D spends) at 1.1 per cent. On full year basis, the PV business delivered ~9 per cent revenue growth and highest ever PBT (bei) at ₹ 1.4K Cr (+₹ 0.7K Cr yoy).

Looking ahead

TML expect the demand for passenger cars to remain strong, although the high base effect, coupled with extraneous factors elections, heat wave, etc. may keep the growth rate moderate. We will continue to focus on retails and deliver market beating growth to sustain double digit EBITDA margins and positive free cash flows for PV business. Tata will continue to proactively drive EV penetration through new product launches and ecosystem development and improve profitability.

Shailesh Chandra, Managing Director of TMPV and TPEM, said “Passenger vehicle sales in India set a record in FY24 with over 4.2 million units sold, driven by SUVs (50 per cent of overall sales) and emission-friendly powertrains. Tata Motors recorded its third consecutive year of highest sales volumes with 6 per cent growth in wholesales and 10 per cent in retail sales over FY23. Our multi-powertrain approach and sharp focus on green technologies increased the penetration of CNG and electric vehicles to 29 per cent in the overall portfolio. We sold 73.8K EVs during the year (up 48 per cent vs FY23) and crossed milestone of 150,000 cumulative EV production. Overall, the business recorded its highest-ever turnover with annual volumes of 573.5K units, growing by 6.0 per cent over FY23, and recorded highest ever profits of ₹1.4K Cr.”