Tata Motors delivered strong Q1 performance. The Q1FY25 net profit came in at Rs 5566 crore, up 73.8% YoY from Rs 3203 crore in Q1FY24. The revenue from operations came in at Rs 108,048 crore in Q1FY25, up 5.7% YoY from Rs 102,236 crore. Lower interest outflow, favourable currency and commodity movements helped Q1 performance. PV revenues declined 7.7%, reflecting the challenging market conditions. However, the CV revenues grew by 5.1% benefiting from better realizations and material cost savings.
Paring off auto debt
The overall finance costs for Tata Motors decreased by Rs 527 crore to Rs 2,088 crore in Q1 FY25, on account of reduction in gross debt. The net auto debt ceme in at Rs 18,600 crore with focus on deleveraging continuing, According to the company, the Q1 net debt is slightly higher due to seasonality.
Tata Motors Demerger in 1 year
The board has approved the Scheme of Demerger of Tata Motors into two separate listed companies and is expected to conclude in the next 12 -15 months. The CV business will be demerged from Tata Motors into a separate listed company while Tata Motors Passenger Vehicles will be merged with existing listed entity, Tata Motors. All CV related investments will move to the “New CV listed entity.” Meanwhile all PV investments will remain in the esting listed entity. The merger of Tata Motors Finance with Tata Capital is also underway and expected to conclude over the course of next 9-12 months.
Future outlook
Going forward, the automotive OEM expects global demand to remain muted and domestic demand to improve gradually on account of continued investments in infrastructure, healthy monsoon, favourable macros and festive demand. They expect commodity prices to remain rangebound largely.
Shailesh Chandra, Managing Director TMPV and TPEM said: “Our multi-powertrain strategy and strong portfolio of SUVs led to steady sales. While the personal segment retails have grown for EVs, there was a sharp decline witnessed in the fleet segment. Going forward, we expect an improvement in overall sales on the back of the onset of the festive season and the launch of Curvv, India’s first SUV Coupe.”
