Tata Motors Reports Consolidated Net Profit At Rs 3,783 Crore In Q2

Tata Motors on Thursday reported a consolidated net profit of Rs 3,783 crore for the September quarter, riding on robust performance by its British arm Jaguar Land Rover.

This is the fourth successive quarter of positive results for the homegrown auto major.

The Mumbai-based company had posted a consolidated net loss of Rs 1,004 crore in the year-ago period.

Total consolidated revenue from operations stood at Rs 1,05,128 crore, as compared with Rs 79,611 crore in the year-ago period, Tata Motors said in a regulatory filing.

On a standalone basis, the company reported a net profit of Rs 1,270 crore for the September quarter, it added.

It had reported a net loss of Rs 293 crore during the same period last fiscal.

Jaguar Land Rover (JLR) reported a revenue of 6.9 billion pounds in the second quarter, up 30 per cent year-on-year, driven by higher wholesales, better mix, cost reductions and investment in demand generation.

Looking ahead, production and wholesale volumes are expected to gradually increase in the second half of the current fiscal, it stated.

The EBIT margin for FY24 is expected to improve to about 8 per cent as compared to 6 per cent-plus previously indicated, it added.

The British brand continues to expect free cash flow of over 2 billion pounds in FY24 with net debt reducing to less than 1 billion pounds by the end of FY24, it added.

All the businesses delivered on their well-differentiated plans this quarter, Tata Motors Group Chief Financial Officer PB Balaji said, adding, "with a strong product pipeline, a seasonally stronger H2 and continued focus on cash accretive growth, we are confident of sustaining this momentum".

In an earnings call with reporters, he said while it is too early to predict demand trends for 2024, the company doesn't see "stress" for the next six months.

The basic underlying factors of Gross Domestic Products (GDP) growth and drivers economy are intact, he said.

"Our view on demand is very strong," he said.

On electric vehicles, he said there is a significant growth story that is playing out in the country and Tata Motors is confident that adoption of EVs would only increase going forward.

Besides, the company is also comfortable with the profitability of its EV business considering investments it has been putting in for various activities, including development of new models.

Tata Motors said JLR's higher profitability year-on-year in the second quarter reflected favourable volume, mix, pricing, and foreign exchange revaluation offset partially by higher fixed marketing and selling costs.

"We have delivered our best ever cashflow in the first half of this financial year and delivered another profitable quarter due to the strength of our financial performance," JLR Chief Executive Officer Adrian Mardell said.

JLR's order book stood at over 1,68,000 units with Range Rover, Range Rover Sport and Defender accounting for 77 per cent.

The British automaker expects production and wholesale volumes to gradually increase in the second half of FY24.

Commenting on the start of production from the second Sanand unit, which Tata Motors acquired from Ford, Balaji said by the fourth quarter the company expects to roll out products without disclosing which models would be produced.

He, however, said the company had rolled out a "fully validated" Nexon from the plant last week.

Balaji also said Tata Motors' domestic business is on track to be net cash positive by March 2024 on the back of upcoming two strong quarters, investments coming in from TPG and the expected IPO of Tata Technologies Ltd.

The business had a debt of Rs 7,600 crore in the second quarter.

Tata Motors said it remained optimistic on demand despite external challenges and anticipated a moderate inflationary environment.

"We aim to deliver a stronger performance in H2 (April-September period), due to a healthy order book at JLR, strong demand for heavy trucks in the commercial vehicle space and new generation products in the passenger vehicle segment," it added.

In the July-September period, domestic wholesale commercial vehicle volumes stood at 99,300 units, up 6 per cent year-on-year, Tata Motors said.

"Going forward, with improvement in consumption, onset of festive season and range bound inflation, we expect these tailwinds to continue while closely monitoring any emerging headwinds in rural demand due to the below average rainfall," Tata Motors Executive Director Girish Wagh said.

The passenger vehicle volumes stood at 1,39,000 units in the second quarter, down 2.7 per cent year-on-year, the company said.

Despite lower volumes and adverse mix, margin improvement was led by strong savings in commodity costs, it added.

"With deliveries commencing of our new generation products, we expect stepped up volumes and profitable growth in the second half of the year," Tata Motors MD Passenger Vehicles Shailesh Chandra said.

Shares of the company ended 1.51 per cent higher at Rs 636.80 apiece on the BSE.