Tata Motors posted net profit of Rs 3300 crore in Q1FY24 driven by sharp improvement in JLR and CV business. The passenger vehicle segment continued to deliver steady performance. The automotive major has clocked a net loss of Rs 5,006.60 crore in Q1 FY23. The revenue from operations increased 42 percent to Rs 1.02 lakh crore in Q1 and EBITDA for the quarter came in at Rs 14,700 crore. Net debt too saw significant decrease QoQ. New launches and reduction in net debt are the other key highlights
The company is optimistic about the demand situation despite near-term uncertainties and expects a moderate inflationary environment to continue. PB Balaji, Group Chief Financial Officer, Tata Motors said: “The distinct strategy employed by each business is now delivering consistent results and making them structurally stronger. We remain confident of sustaining this momentum in the rest of the year and achieve our stated goals.”
What’s particularly interesting is the company’s net debt situation. The company’s net auto debt reduced to Rs 41700 crore driven by margin improvement in JLR business and commercial vehicles. The JLR business alone saw 451 million pound worth free cash flow in the quarter and the net debt stood at 2.5 billion pound after decreasing by 0.5 billion pound QoQ on higher free cash flows.
JLR buisness improves
JLR’s revenues in Q1 FY24 came in at 6.9 billion pound, up 57% (YoY). The higher profitability year-on-year reflects favourable volume, mix, pricing and foreign exchange revaluation offset partially by higher inflation and supplier claims. The order book strong at 185,000 units with Range Rover, Range Rover Sport and Defender representing 76% of the order book. The Q2 production and cashflow is expected to be lower than Q1 reflecting the annual summer plant shutdown while wholesales and profitability are expected to be more in line with recent quarters. Adrian Mardell, JLR Chief Executive Officer, said: “We have had a strong start to the financial year and delivered our highest production levels in nine quarters and our highest Q1 cashflow on record.”
Alternate fuel driving PVs
The overall PV volume is up 7 percent and the market share improved by 70 bps in Q1 and EV penetration is currently at 14% while CNG penetration stands at 8% in Q1 FY24. The Tiago EV saw strong response and accounted for 10,000 deliveries in less than 4 months. The Altroz iCNG equipped with India’s first twin-cylinder CNG technology is another bright spot in the quarter. The company expects EV profitability to improve H2 onwards. Overall steady demand is likely with the onset of the festive season whilst the electrification trend is set to strengthen further. Shailesh Chandra, Managing Director TMPV and TPEM said: “SUVs continued to spearhead sales contributing 64% while sales of cars were buoyed by the multi-power train offerings of the Tiago and Altroz. Continuing with our thrust on EVs, in Q1 FY24, we recorded the highest ever quarterly sales of 19,346 vehicles. Going forward, we expect a stable supply chain and robust demand with the onset of the festive season in the second half of Q2 FY24.”
CV volumes hit by seasonality, new norms
Apart from seasonality, the commercial vehicles industry was impacted by the transition to BS 6 Phase 2 emission norms in Q1. The company expects demand to improve sequentially through FY24. Girish Wagh, Executive Director Tata Motors said, “We will continue to drive our demand-pull strategy and step up our competitiveness with improved availability of our exciting range of products as the year progresses.”
