Due to a slowdown at Jaguar Land Rover (JLR) and lower margins, Tata Motors reported a 22% decline in Q3 net profit, missing forecasts. Despite a little increase in revenue, the business was apprehensive about demand, particularly in China.
For the third quarter of FY25, Tata Motors Ltd. reported a consolidated net profit of Rs 5,451 crore, a 22% year-over-year decline that fell short of expert projections. Despite a sequential improvement, the automaker’s performance was hindered by poorer margins and muted Jaguar Land Rover (JLR) volumes.
A little increase in overall sales drove a 2.7 percent year-over-year increase in revenue from operations to Rs 1,13,575 crore. Earnings before interest, tax, depreciation, and amortization (EBITDA) margins, on the other hand, dropped 60 basis points to 13.7% year over year. EBIT, or earnings before interest and tax, increased by 60 basis points to Rs 10,000 crore.
Prior to the release of the Q3 results, Tata Motors’ stock finished 3.3 percent higher on the Tata Motors share price NSE at Rs 752.5.
For Tata Motors share, Jefferies’ price objective of Rs.660 is also the lowest available. Since its peak, the stock has already had a 36% correction.
Segmental performance of Tata Motors in Q3
- Jaguar Land Rover (JLR): The luxury car division 2025 earned a record GBP 7.5 billion in revenue during the quarter, up 1.5% from the year before. While the EBITDA margin shrank 200 basis points to 14.2 percent, the EBIT margin remained at 9 percent, the best level in a decade. JLR made GBP 523 million before taxes (excluding unusual items), which was less than the GBP 627 million it made the previous year. The company remained cautious about demand, especially in China, but noted supply chain improvements as a crucial contributor in sequential increase.
- Commercial Vehicles (CV): Due to lower volumes and an unfavorable product mix, the segment’s revenue decreased 8.4% year over year to Rs 18,431 crore. However, with the help of material cost reductions and advantages from the government’s Production Linked Incentive (PLI) program, EBITDA margins increased to 12.4%, up 130 basis points.
- Passenger Vehicles (PV): Revenue for this sector fell 4.3% to Rs 12,354 crore. Despite this, cost-cutting initiatives and PLI incentives helped the EBITDA margin increase by 120 basis points to 7.8%. Although fleet sales were hampered by the expiration of FAME II subsidies, the company’s personal segment EV sales increased 19% year over year.
According to Tata Motors, its profit before tax (before extraordinary items) decreased by Rs 75 crore from the same time last year to Rs 7,700 crore. Improved volumes contributed to the automotive industry’s Rs 4,700 crore free cash flow, while a decrease in gross debt caused finance expenses to drop by Rs 760 crore to Rs 1,725 crore.
Prospects
In its statement, Tata Motors stated that it anticipates a steady improvement in demand, bolstered by future model launches, stable interest rates, and infrastructure improvements. The fourth quarter is expected to see additional improvement in JLR’s wholesale volumes, although the company is still wary of general demand trends, especially in China.
“In Q3, we produced a sequential improvement in every business. PB Balaji, Group CFO at Tata Motors, stated, “We are confident of delivering another strong performance this year, despite external challenges, because our fundamentals remain strong.”
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