Tata Motors Q4 Results: Net profit jumps over 3-folds on robust demand, JLR revenue up 11% YoY; 5 key highlights

Tata Motors Q4 Results: Tata Motors announced its January-March quarter results for fiscal 2023-24 (Q4FY24), reporting a surge of 222 per cent to ₹17,407.2 crore, compared to ₹5,400 crore in the corresponding period last year. India's most valuable carmaker beat D-Street estimates as it reported a more than three-fold increase in net profit driven by a tax credit surge and strong performance across all its auto businesses, especially the sales of sport utility vehicles (SUVs) from its British luxury car unit, Jaguar Land Rover (JLR).

“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,'' said PB Balaji, Group Chief Financial Officer (CFO), Tata Motors.

Follow Tata Motors Q4 Results Live Updates: Net profit rises 221% YoY to ₹17,529 crore, declares dividend of ₹6 per share

On the near-term outlook, Tata Motors remains cautiously optimistic on the 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, we are confident of delivering a strong performance in FY25,'' said Tata Motors in its regulatory filing to the stock exchanges on Friday, May 10.

Here are 5 key highlights of Tata Motors Q4 scorecard:

1.P&L Account: Revenue, Operating Performance

Tata Motor's total revenue from operations in the fourth quarter of FY24 rose 14.3 per cent to ₹1.2 lakh crore, compared to ₹1.05 lakh crore in the year-ago period. Britain-based JLR, known for the Ranger Rover and top-selling Defender SUVs, is key to Tata Motors' quarterly results, forming about two-thirds of its consolidated revenue.

On the operating front, the auto major's earnings before interest, taxes, depreciation, and amortization (EBITDA) in the March quarter rose 33 per cent to ₹17,035 crore, compared to ₹12,810 crore in the year-ago period. EBITDA margin in the quarter-under-review stood at 14.2 per cent, up 210 basis points (bps), compared to 12.1 per cent in the year-ago period. One basis point is one-hundredth of a percentage point. 

2.Dividend

The automakers' board recommended final dividend of ₹6 per ordinary share and ₹6.20 per ‘A’ ordinary share for the financial year ended March 31, 2024. The dividend, if declared at the annual general meeting, shall be paid to the eligible shareholders on or before June 28, 2024.

‘’We would like to inform that the board of directors at its meeting held today has recommended declaration of final dividend of ₹6 per ordinary share of ₹2 each (at 300 per cent) ( ₹3 normal dividend and ₹3 special dividend) and ₹6.20 per ‘A’ Ordinary share of ₹2 each (at 310 per cent) ( ₹3.10 normal dividend and ₹3.10 special dividend) for the financial year ended March 31, 2024,'' said Tata Motors in its stock exchange filing.

Also Read: Tata Motors erases domestic debt, targets net-cash goal for JLR in FY25

3.JLR Q4 scorecard

The company's British arm Jaguar Land Rover had "another record-breaking quarter in Q4 FY24. JLR's net profit in the March quarter was £1.4 billion pounds compared to £259 million in the year-ago period. JLR's revenues for FY24 were £29 billion, its highest-ever full-year revenue and up 27 per cent compared to FY23, while net profit for FY24 stood at £2.6 billion.

JLR’s wholesale volumes, excluding the China joint venture Chery Jaguar Land Rover, rose 16 per cent from a year earlier to 110,190 units due to improved production and strong global demand, it said last month. Retail sales climbed 11 per cent.

"We have delivered a record financial performance for the company, generating free cash flow 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 JLR's modern luxury vehicles, led by Range Rover and Defender brands, underpinned by a consistent focus on operational improvement,'' said Adrian Mardell, Chief Executive Officer (CEO), JLR.

JLR's pre-tax profit soared 80 per cent to £661 million in Q4FY24 after generating record quarterly revenue of £7.9 billion. JLR has been battling to reduce a large order backlog caused by the global chip shortage that emerged from the pandemic. The order book was cut to 133,000 by the end of FY24, with Range Rover, Range Rover Sport and Defender making up the bulk of orders. 

Tata Motors expects JLR's earnings before interest and taxes (EBIT) margins in FY25 to be similar to the 8.5 per cent it clocked in the previous fiscal year. JLR is targeting an EBIT margin of over 10 per cent by FY26. It expects a “modest” rise in its investment spend to £3.5 billion and aims to become net debt zero in the fiscal year 2025.

‘’China and the US will drive demand for JLR’s cars, while there could be some “stress” in the UK market,'' said CFO P B Balaji. ‘’JLR is shifting toward cleaner transport and plans to launch its first electric Range Rover this year. Around 33,000 people have signed up to the waiting list for the electric model since it opened in December'', said Richard Molyneux, CFO, JLR.

The company is also exploring India’s nascent electric car market. “All options are on table,” Balaji said when asked whether JLR is considering applying for India’s new electric vehicle (EV) policy that allows foreign automakers to bring cars into the country at reduced taxes if they invest in a local factory.

The company is planning to separate its passenger vehicle operations — which includes JLR, cars and electric vehicles — from the commercial vehicle business that manufactures trucks and buses. The spinoff will be completed between April and July next year, said P B Balaji.

The British company is shifting towards a cleaner transport and plans to launch its first electric Range Rover this year. It had more than 16,000 sign-ups for the electric model after opening the waiting list in December 2023.

Also Read: Tata Sons doubles royalty fee for group firms: Here's how much Tata Steel, TCS, Tata Motors will pay

4.Tata Motors Commercial Vehicles (CV)

Tata commercial vehicles' Q4 FY24 revenue was at ₹21,600 crore, while FY24 revenue was ₹78,800 crore. In Q4 FY24, domestic wholesale commercial vehicles (CV) volumes were 1,04,600 units, lower seven per cent year-on-year on account of increased pre-buy in Q4 FY23 due to BS6 Phase II transition.

Tata Motors Ltd Executive Director Girish Wagh 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 five states and the announcement of general elections.

"Our sharp focus on profitable growth resulted in the CV business recording its highest-ever revenues of ₹78,800 crore and profits of ₹6,100 crore 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," he added.
 

5.Tata Passenger Vehicles (PV)

Tata passenger vehicles clocked revenue of ₹14,400 crore in the March quarter while for the full year FY24 it was at ₹52,400 crore. In Q4FY24, PV volumes were at 1,55,600 units, up 14.8 per cent from the year-ago period, supported by new SUV facelifts and multiple power trains, said Tata Motors.

"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," said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.

The company sold 73,800 EVs during the year, marking a 48 per cent increase as compared to FY23 and crossed a milestone of 1.5 lakh cumulative EV production, he added. India's third-largest carmaker by sales, is known for its 'Nexon' and 'Punch' SUVs. It also dominates sales of EVs in the country. Ahead of the announcement of Q4FY24 results, shares of Tata Motors settled 1.62 per cent higher to ₹1,046.85 apiece on the BSE.