Tata Motors Q2 FY2025: Net Profit Down by 11%, Revenue Falls by 3.5%

Tata Motors announced its financial results for the quarter ended September 2024 (Q2 FY25), reporting an 11% year-on-year decline in net profit to ₹3,343 crore, down from ₹3,764 crore in the previous year. Revenue from operations also slipped by 3.5%, reaching ₹1.01 lakh crore compared to ₹1.05 lakh crore in the same period last year. The company reported an EBITDA of ₹11,600 crore, achieving an EBITDA margin of 11.4%.

JLR revenue declined by 5.6% to £6.5 billion, with the company noting that temporary supply constraints affected performance, resulting in an EBIT margin of 5.1%. Commercial Vehicle revenue decreased by 13.9%, although EBITDA margins improved to 10.8%, supported by favorable pricing and material cost savings despite lower volumes. Passenger Vehicle revenue dropped by 3.9%, but EBITDA margins held steady at 6.2%, driven by a better product mix and cost reduction initiatives.

Key Highlights:

• Revenue: ₹1.01 lakh crore, down by 3.5% YoY.
• Net Profit: ₹3,343 crore, decreased by 11% compared to last year.
• Management's Take: Growth impacted by significant external challenges. Business fundamentals remain strong. Outlook remains positive. 
• Stock Reaction: Before the announcement of the Q2 results, shares of Tata Motors closed 2% lower at ₹803.55 in a weak market.

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Management Commentary

Post Tata Motors’ Q2 results announcement, the company stated that it remains cautious about near-term domestic demand but anticipates that the festive season and significant infrastructure investments will provide a boost. With easing supply challenges, JLR wholesales are projected to improve significantly. Overall, Tata Motors expects a performance recovery in the second half of FY25 and aims to achieve a net debt-free position by the end of the fiscal year.

PB Balaji, Group Chief Financial Officer of Tata Motors said, “Growth in the quarter was impacted due to significant external challenges as highlighted earlier. Overall, the business fundamentals remain strong, and we remain focused on our agenda of driving growth, competitiveness and free cash flows. As the supply challenges ease and demand picks up, we are confident of steady improvement in our performance and delivering a strong H2.”

Stock Market Reaction

Tata Motors' Q2 results were announced on Friday, post-market hours. On Friday, Tata Motors share price closed at ₹803.55, down by 2% on NSE, ahead of the results announcement.

About Tata Motors

Tata Motors Limited, an Indian multinational automotive company headquartered in Mumbai, is part of the Tata Group. Its subsidiaries include Jaguar Land Rover in the UK and Tata Daewoo in South Korea. Tata Motors also has joint ventures with Hitachi, forming Tata Hitachi Construction Machinery.