Tata Motors Q4 results: PAT grows three-fold, India biz now debt free

Mumbai-headquartered Tata Motors has posted a more than threefold jump in its profit after tax (PAT) for the fourth quarter of 2023-24 to Rs 17,528 crore, riding on 13.3 per cent growth in revenue.

Consolidated revenues for the quarter came in at nearly Rs 1.20 trillion.
 

For the full year, the auto giant posted a 12-fold jump in net profit to Rs 31,806 crore.

Consolidated revenues for the full year were the highest ever at nearly Rs 4.38 trillion. In FY24 the company had the best ever revenue; the highest ever earnings before interest, tax, depreciation and amortisation, or Ebitda (Rs 62,800 crore); the highest ever profit before tax and exceptional items (Rs 28,900 crore); the highest ever free cash flow for the auto business (Rs 26,900 crore); and the highest ever dividend payout (Rs 2,310 crore).

 

The stock reacted positively to the results, which came in line with analyst estimates, ending the day’s trade on the BSE at Rs 1,046.85, up 1.62 per cent. 

The board of directors has recommended a final dividend of Rs 3 per Ordinary Share and Rs 3.10 per A Ordinary Share and a special dividend of Rs 3 per Ordinary Share and Rs 3.10 per A Ordinary Share subject to approval by the shareholders.
 

PB Balaji, group chief financial officer, said: “It is pleasing to report the results of FY24, during which Tata Motors Group delivered its highest ever revenues, profits, and free cash flows. The India business is now debt-free, and we are on track to become net automotive debt-free on a consolidated basis in FY25. The businesses are executing well on their distinct strategies and therefore, we are confident of sustaining this strong performance in the coming years.”
 

The company said it remained “cautiously optimistic” on domestic demand over the full year and expected H1FY25 to be “weaker”.

ALSO READ: Tata Motors tops Indian auto market with Punch Mini SUV, beats Maruti
 

Jaguar Land Rover (JLR), the luxury car arm of Tata Motors, posted record Q4 revenues of £7.9 billion (up 11 per cent), and its Q4 profit after tax (PAT) was £1.4 billion versus profits of £259 million in the same quarter a year ago.
 

JLR posted a FY24 PAT of £2.6 billion on record revenues of £29 billion. JLR’s net debt reduced to £0.7 billion.
 

As for the passenger vehicles business, revenues grew 19.3 per cent in Q4FY24 to Rs 14,400 crore, while PAT came in at Rs 394 crore versus Rs 142 crore in the same quarter previous year.
 

In Q4, the passenger-vehicle (internal combustion engine) business delivered double-digit Ebitda margins and the electric-vehicle business was Ebitda positive (before research and development spend) at 1.1 per cent.
 

Shailesh Chandra, managing director Tata Motors PV and Tata Passenger Electric Mobility, said: “Passenger vehicle sales in India set a record in FY24 with over 4.2 million units sold, driven by sport utility vehicles (50 per cent of overall sales) and emission-friendly powertrains. Tata Motors recorded its third consecutive year of highest sales volumes with 6 per cent growth in wholesales and 10 per cent in retail sales over FY23. Our multi-powertrain approach and sharp focus on green technologies increased the penetration of CNG and electric vehicles to 29 per cent in the overall portfolio. We sold 73,800 electric vehicles during the year (up 48 per cent vs FY23) and crossed the milestone of 150,000 cumulative EV production.”

TaMo Royalty payment to Tata Sons touches Rs 500 crore in FY24

Tata Motors paid a royalty fee of Rs 500 crore in FY24 for using the Tata brand name to Tata Sons, significantly up from Rs 118 crore paid in FY23. PB Balaji, Group CFO, Tata Motors, said earlier the royalty payment was linked to profits, and this was changed in FY24 to link it to revenues. The amount, however, has been capped at Rs 500 crore, and this year due to the strong performance, Tata Motors is hitting the cap of maximum royalty fees paid to Tata Sons.

Balaji also explained that the royalty payment is towards the use of the brand Tata and the power that it gets from the brand in terms of its financing arrangements and ratings upgrades that they get because of the Group, as well as the association with the cricket league IPL. Earlier, the contract was linked to whether the company was making profits, which was changed in FY24 and linked to revenues (around 10 basis points of revenue). 

Ratan Tata, the chairman emeritus of Tata Sons, introduced the brand subscription scheme in 1996.