Tata Motors has seen one of the most sustained turnarounds, thanks to a path of fiscal discipline, product launches, and market acceptance.
In fact, the Chairman of Tata Group, Natarajan Chandrasekaran (N Chandrasekaran) in his speech at the recently held Tata Motors 78th Annual General Meeting (AGM) stated that “We have an exciting journey ahead of us and the management teams or very committed and focused towards accelerating our journey towards this transformation that we are forcing it all the three businesses – commercial vehicles, passenger vehicles and Jaguar Land Rover.”
The company is targeting leadership positions in all three vehicle segments. In the passenger vehicle segment, it aims to lead the electrification space as well. expect Tata Motors domestic business to become near net-debt zero in FY24 and JLR in the following year.
He started his speech by stating that overall macro trends for the last 3-4 years had been difficult. This was due to the fact both the global geopolitical as well as economic environment was still evolving.
“We have moved from low growth and high inflation environment. The world is now moving towards less growth and a less inflation environment. The global GDP growth is expected to be around 2.6% during 2023 and inflation is supposed to fall from 6.5% in 2022 to 4.0%,” he said.
Chandrasekaran said that there has been divergence because the major economies the US economy continues to be very resilient. In contrast, the Eurozone and China seem to have a slowdown in the growth momentum.
But the good news is that “all major developed nations of the world will dodge recession.”
In all this he sees India continue to remain a strong economy with a projected growth rate of about 6.4% this fiscal year. He expects strong activity in manufacturing as well as services across sectors.
Globally businesses and nations are also seeing an acceleration in the adoption of megatrends – digitilisation, artificial intelligence (AI), energy transition and transition towards resilient supply chain.
Tata Motors
The Tata Motors Group which operates in three key areas – commercial vehicles, passenger vehicles and Jaguar Land Rover – has registered smart growth across.
With sales of 13.66 lakh vehicles, up 23 percent, the company’s profitability came back in the green in the second half of FY2023. It reported a free cash flow of Rs 7,800 crore versus a negative Rs 9,500 crore in FY2022. This resulted in the net automotive debt coming down to Rs 43,600 crore.
“Tata Motors is incorporating all these as it is marching towards a strong future with a clear strategic agenda as identified and indicated last year. The PV & EV business continued its robust performance for the third year in succession. The business registered its highest ever annual sales of around 5,41,000 vehicles in FY23, a growth of 45% over FY22. It became only the third OEM in India to cross the 5,00,000 annual sales mark. EV sales crossed the coveted 50,000 annual sales milestone and constituted 12% of the sales portfolio in Q4. We are stepping-up efforts to further democratise and localise the EV revolution,” said the Chairman.
For FY2023, Tata Motors’ passenger vehicles business recorded the highest-ever revenues of Rs 47,900 crore and delivered EBITDA and EBIT margins of 6.4% and 1%.
In the CV segment, Tata Motors says it moved away from a ‘supply chain push’ to a ‘demand pull’ model by focusing on VAHAN registration volumes and achieved double-digit EBITDA margins in Q4 FY23. The business recorded revenues of Rs 70,800 crore and delivered EBITDA and EBIT margins of 7.4 percent and 5.2 percent.
“The CV business is fast transitioning from being pure play OEM to a holistic solution provider. We are accelerating this transition by creating and delivering more value, a win-win proposition for both our customers as well as our business,” he says.
Jaguar Land Rover
The luxury car brand witnessed disruption due to the ongoing semiconductor shortage especially in the first half of FY2023, with some easing in the second half it was able to see improvement in production and sales.
It clocked sales of 321,362 units, up 9 percent, which resulted in revenue of 22.8 billion sterling pounds, up 24.5 percent. Jaguar Land Rover currently has a ‘health order book of 200,000 vehicles’.
The transformation of Jaguar into an all‑electric luxury brand is on track with the first new vehicle expected to be launched in 2024 and customer deliveries starting in 2025. It will also start taking pre‑orders for the maiden pure electric Range Rover later this year.
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