Tata Motors Q4 Results FY24: Profit Falls 51% YoY Despite Strong Operational Performance

by

Tata Motors, one of India’s leading automobile manufacturers, recently announced its financial results for the fourth quarter of the financial year 2023-24 (Q4 FY24). While the company demonstrated strong performance in several segments, its consolidated net profit plunged 51% year-on-year, highlighting a mix of operational gains and macroeconomic challenges.

Major Highlights:

  • Net Profit: ₹8,470 crore, down from ₹17,407 crore in Q4 FY23.
  • Revenue: ₹1.19 lakh crore, nearly flat year-on-year.
  • Dividend: ₹6 per share announced.
  • JLR Revenue: £7.9 billion – a record high.
  • Commercial Vehicles Volume: Declined by 7% YoY.
  • Passenger Vehicles Revenue: Up by 19% YoY.
  • Electric Vehicle (EV) Market Share: 73.1%.

Why Did Profit Drop?

The significant 51% fall in profit is mainly due to the absence of a one-time tax benefit that boosted last year’s earnings. Despite this, the company has maintained a robust revenue base, driven by its premium segments and operational efficiencies.

Segment-Wise Performance Breakdown

1. Jaguar Land Rover (JLR)

JLR continued to be a bright spot for Tata Motors with:

  • Record quarterly revenue of £7.9 billion, up 11% YoY.
  • Improved EBIT margin of 9.2%, driven by better volumes and lower input costs.

However, JLR refrained from issuing a future profitability forecast due to uncertainty arising from the U.S. tariff war, which could affect luxury car imports.

2. Commercial Vehicles (CV)

  • Domestic CV wholesale volume: 104,600 units, down 7% YoY.
  • Revenue: ₹21,600 crore, slightly up by 1.6% YoY.
  • EBIT margin: 9.6%.

The drop in volume was attributed to a pre-buy effect in Q4 FY23, caused by the implementation of BS6 Phase II norms.

3. Passenger Vehicles (PV)

Tata Motors’ PV segment showed impressive growth:

  • Revenue: ₹14,400 crore, up 19% YoY.
  • EBIT margin: Improved to 2.9% from 1.4% last year.
  • The company maintained leadership in the EV space with a market share of 73.1%, despite rising competition.

Challenges Ahead: Tariffs, Elections & Demand Uncertainty

Tata Motors has flagged a challenging macroeconomic environment, particularly for JLR, as U.S. tariffs on foreign-made EVs are expected to impact global luxury car sales.

On the domestic front, analysts have raised concerns about:

  • Order book moderation at JLR.
  • Possible slowdown in PV demand due to election-related economic uncertainty.
  • Tougher competition in the Indian EV and PV segments.

Following the results, Tata Motors stock dropped over 9%, indicating investor concerns over future earnings.

What the Management Said

Despite short-term headwinds, Tata Motors’ management remains optimistic:

  • They expect a weaker first half of FY25 but anticipate improvement in the second half.
  • The company continues to invest in electrification, brand building, and operational improvements.
  • Tata Motors aims to maintain profitability through cost optimization, volume growth, and enhanced customer experiences.

Final Thoughts

The Q4 FY24 results are a mixed bag for Tata Motors. While the company shows strong fundamentals and leadership in EVs, external challenges like the tariff war and a subdued economic environment could impact its momentum. However, with a strong brand, strategic focus, and growth in premium and EV segments, Tata Motors remains well-positioned for long-term growth.

Leave a Comment