Tata Motors Q3 FY25 Result: Revenue Growth, New Product Launches & Sustainability Efforts

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Tata Motors Q3 Result and Concall: February 2025 Updates

Tata Motors Q3 Result and Concall: February 2025 Updates

Tata Motors Q3 Financial Performance Highlights

Tata Motors Q3 FY25 Results:

Tata Motors’ revenue grew by 2.7% to reach ₹18,400 crores.
The company reported a 60 basis points (bps) improvement in EBIT.
Profit Before Tax (PBT) rose to ₹22,300 crores, marking a nearly ₹3,000 crore increase compared to last year.
Free cash flow stood at ₹4,700 crores, while net debt closed at ₹19,200 crores.
Jaguar Land Rover (JLR) played a key role, with its EBIT contribution increasing from 8.3% to 8.9%.

Key Growth Drivers

Volume and Product Mix:

Improved volume and product mix contributed to growth.
The recent rupee depreciation also helped performance.

Domestic Business:

Tata Motors’ Indian operations returned to a net cash status, reaching ₹700 crores.

Corporate Updates

Demerger Progress:

The demerger process is moving forward, with NOC from the Stock Exchange and SEBI expected soon.
The appointed date is July 1, with the effective date anticipated for October 2025.

PLI Scheme:

Tata Motors received an eligibility certificate for Production-Linked Incentives (PLI).
Cash claims of ₹142 crores for the previous year were fully received, with an additional accrual of ₹209 crores recorded.

Jaguar Land Rover (JLR) Performance

Q3 Achievements:

JLR recorded its highest-ever Q3 revenue of GBP 7.5 billion.
Wholesale volume reached 104,000 units.
EBIT margin stood at 9%, the highest in a decade.
Despite market challenges, positive cash flow was maintained.

Regional Insights:

Sales in China declined due to normalization of retailer stock.
In contrast, U.S. sales grew by 25% year-to-date.

Profitability Details:

PBT dropped from GBP 627 million to GBP 523 million.
Higher-margin models like Range Rover and Defender supported profitability.
Increased warranty costs impacted earnings, but quality improvements are a management focus.

Commercial Vehicles (CV) Segment

Market Performance:

Tata Motors improved its market share in trucks and passenger vehicles despite a decline in small commercial vehicles (SCV).
Q3 CV revenue stood at ₹18,400 crores, an 8.4% decline year-on-year.

Segment Insights:

Bus and van sales grew by 11% year-on-year.
Heavy commercial vehicles saw a 9% decline but improved quarter-on-quarter.
Increased freight rates and utilization trends provided positive signs.

Passenger Vehicles (PV) Segment

Sales and Market Position:

Record retail sales were achieved during Q3, boosted by festive demand and strong marketing.
Tata Motors increased its market share by 0.7%.
SUVs, especially Nexon CNG and Curvv, drove sales.
EV penetration rose to 24%, with total EV sales up by 15%.

Financial Performance:

PV revenue increased from ₹11,700 crores to ₹12,400 crores.
Combined PV and EV EBITDA margins stood at 7.8%, benefiting from PLI approvals.

Recent Developments

Product Launches:

Tata Motors showcased the all-new Tata Sierra and Harrier EV at the Auto Expo.
New battery electric vehicles and hydrogen internal combustion engine trucks were introduced.

Digital Transformation:

The Fleet Edge platform now has over 760,000 active vehicles.
E-Dukaan for spare parts and Fleet Verse for online vehicle sales continue to grow.

Sustainability Initiatives:

The Lucknow plant achieved Zero Waste to Landfill Certification.
Decarbonization strategies and circularity initiatives remain key priorities.

Industry Outlook

Market Trends:

Management expects gradual improvement in domestic demand, supported by infrastructure spending and new product launches.
JLR anticipates better wholesales in Q4, depending on retail demand.

Challenges:

Demand in China and the overall macroeconomic environment remain concerns.
Management is focused on maintaining dealer inventory levels to support margins.

Summary

Tata Motors delivered a solid performance across segments in Q3 FY25. With growth in EVs, CVs, and strategic digital transformations, the company continues to navigate challenges in the market. New product launches, sustainability efforts, and strong financial results showcase its resilience and future potential.