Prime Highlights
- Tata Motors PV revenue surged 49% to ₹18,700 crore, while margins expanded to 9.4%, beating estimates.
- JLR revenue declined due to lower volumes and competition in China, but profitability remained above expectations.
Key Facts
- Tata Motors is one of India’s largest automobile makers with operations across passenger, commercial and electric vehicles.
- Jaguar Land Rover plans to lower its breakeven volume to nearly 3 lakh units within two years.
Background
Tata Motors reported a stronger-than-expected performance from its India passenger vehicle business in the fourth quarter, while its luxury arm Jaguar Land Rover delivered mixed results due to lower volumes and weakness in China.
Tata Motors’ passenger vehicle business in India posted revenue of ₹18,700 crore during the quarter, marking a 49% rise from a year ago and exceeding market expectations of ₹17,800 crore. Its operating margin expanded by 150 basis points to 9.4%, also surpassing estimates of 7.5%.
The company said passenger vehicle and electric vehicle volumes grew 37% year-on-year. Better product mix, higher volumes and operating leverage supported margins, although lower pricing and commodity-related pressures partly offset the gains.
JLR reported revenue of £6.9 billion for the quarter, down 11.1% from the previous year and below analyst estimates of £7.4 billion. Its EBITDA margin declined 130 basis points to 14%, but remained ahead of Street expectations of 10.4%.
The luxury vehicle business said planned phase-out of older Jaguar models and intense competition in China affected volumes and profitability. JLR added that it plans to reduce breakeven volumes to around 3 lakh units over the next two years.
Brokerage firm CLSA maintained an outperform rating on Tata Motors with a target price of ₹468, implying a potential upside of 38%. The brokerage expects growth to improve with new launches, especially EVs, and further cost-cutting measures.
