Tata Motors Q2 Results: Drop in PAT, H2 outlook among 5 key highlights from automaker’s earnings show
Tata Motors reported an 11% YoY decline in consolidated net profit to ₹3,343 crore for Q2 FY25, down from ₹3,764 crore last year. Revenue also fell by 3.74% to ₹100,534 crore compared to ₹104,444 crore in the previous year.
Tata Motors Q2 Results: Automaker Tata Motors on Friday, November 8, reported its second quarter results for the financial year 2025, wherein it witnessed a decline in both revenue and profits.
The company's management highlighted near-term challenges while it remains hopeful of a turnaround in the second half of the financial year.
Here are key takeaways from Tata Motor's Q2 earnings:
PAT, revenue, margins dip
The Tata group company reported an 11 per cent year-on-year (YoY) fall in consolidated net profit to ₹3,343 crore for the quarter ended September 2024 (Q2 FY25). The figure stood at ₹3,764 crore in the same period last year.
Meanwhile, the revenue declined by 3.74 per cent to ₹100,534 crore in Q2 FY25 from ₹104,444 crore in the year-ago period.
Earnings before interest, tax, depreciation and amortization (EBITDA) declined by 16% to ₹11,567 crore from ₹13,767 crore YoY. Meanwhile, amid a challenging external environment, the EBITDA declined by 230 bps YoY to 11.4%.
Outlook: Near-term challenges persist
Tata Motors said it remains cautious about near-term domestic demand but sees a turnaround helped by the festive season and substantial investments in infrastructure.
JLR wholesales are expected to improve sharply, as supply challenges ease, it said.
"Overall, we expect an all-round improvement in performance in H2 FY25 and the business to become net debt free by this year,” said the company in a press release.
PB Balaji, Group Chief Financial Officer, Tata Motors added, “Growth in the quarter was impacted due to significant external challenges as highlighted earlier. Overall, the business fundamentals remain strong, and we remain focused on our agenda of driving growth, competitiveness and free cash flows. As the supply challenges ease and demand picks up, we are confident of steady improvement in our performance and delivering a strong H2.”
JLR revenue drops 6%
Jaguar Land Rover's (JLR) revenue for the quarter was £6.5 billion, down 5.6% versus Q2 FY24, impacted by temporary supply constraints. EBIT margin dropped 220 bps in the said quarter to 5.1%.
The company said its profitability was impacted on account of temporary aluminum supply constraint and a hold placed on 6,029 vehicles for additional quality control checks. It expects production and wholesale volumes to recover strongly in H2.
“Both production and wholesale volumes are expected to pick up strongly in the second half as the aluminum supply situation normalizes. We will continue our diligent management of costs. We maintain our full-year guidance, targeting revenue of approximately £30 billion, an EBIT margin of ≥8.5%, and a positive net cash position,” Tata Motors said in a press release.
CV sales, revenue fall
In Q2 FY25, domestic wholesale commercial vehicle (CV) volumes totalled 79.8K units, posting a 19.6% YoY decline. This was primarily driven by a slowdown in infrastructure project execution, reduced mining activity, and a general drop in fleet utilisation due to heavy rains, said the firm.
Exports stood at 4.4K units, down 11.1% YoY. Revenues decreased by 13.9% YoY to ₹17,300 crore. However, EBITDA margins improved to 10.8%, up 40 basis points YoY, supported by savings in commodity costs.
As we move forward, with the rains easing, increased infrastructure spending, and the arrival of the festive season boosting consumption, we anticipate demand to pick up gradually in Q3. This is expected to be led by the ILMCV and Buses segments, followed by the M&HCV and SCVPU segments, the company said.
PV Business Update
Passenger vehicle (PV) volumes stood at 130.5K units, a 6.1% year-on-year (YoY) decline, driven by slow consumer demand and seasonal factors. Revenues for Q2 FY25 were ₹11,700 crore, down 3.9% YoY. EBITDA margins remained stable at 6.2%, down 30 basis points YoY, despite weak industry demand, due to material cost savings and an improved product mix.
In Q2 FY25, the PV (ICE) business delivered consistent EBITDA margins of 8.5%, while the EV business reported an EBITDA margin of -5%. However, excluding product development expenses, the EV business saw positive EBITDA margins of 1.7%.
We expect industry wholesale volumes to be lower in the near term to facilitate channel inventory reduction ahead of the new calendar year, the company said.
“Our focus will be on driving significant growth in retail through new model launches and an extensive marketing campaign while maintaining control over channel inventory. We will continue to strengthen our multi-powertrain strategy to capitalize on industry shifts and enhance profitability through scale benefits, improved mix, and intensified cost-reduction measures, all while navigating a highly competitive environment,” Tata Motors added.
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