Tata Motors Q2FY25 results: Net profit down 11%, revenue dips 3.5%

The stock fell 1.74 per cent on Friday to Rs 805 per share, as the company missed street estimates, which had projected a net profit of around Rs 5,000 crore

Automobile major Tata Motors posted an 11 per cent dip in net profit for the second quarter (Q2) this financial year to Rs 3,343 crore as its revenue declined by 3.5 per cent to a little above Rs 1.01 trillion on account of the company facing challenges on sales of electric vehicles (EVs) as well as small commercial vehicles (SCVs).

 

For the first half of the year, revenue growth was 1 per cent at about Rs 2.09 trillion, while its net profit grew 28 per cent to Rs 8,909 crore.

 

The stock was down 1.74 per cent on Friday to Rs 805 as the company missed street estimates, which were expecting net profit of around Rs 5,000 crore.

 

P B Balaji, group chief financial officer, said: “Growth in the quarter was impacted due to significant external challenges as highlighted earlier. 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.” 

 

During the quarter, revenue from Jaguar Land Rover was down 5.6 per cent to £6.5 billion as the luxury carmaker was impacted by temporary supply constraints, resulting in Ebit (earnings before interest and tax) margins of 5.1 per cent, down 220 basis points (bps).

 

Profitability was impacted on account of temporary aluminium supply constraints and sales of 6,029 vehicles getting held up for additional quality-control checks.

 

Production and wholesale volumes are expected to recover in the second half, the company said.

 

Girish Wagh, executive director, said with the monsoon easing, increased infrastructure spending, and the arrival of the festival season boosting consumption, demand for commercial vehicles is expected to pick up.

 

Passenger vehicle (PV) revenues were down by 3.9 per cent but the Ebitda (earnings before interest, tax, depreciation, and amortisation) margins were steady at 6.2 per cent (down 30 basis points) through mix improvements and cost reduction actions.

 

Shailesh Chandra, managing director, Tata Motors PV and Tata Passenger Electric Vehicle, pointed out the passenger-vehicle industry witnessed a 5 per cent decline in registrations in Q2FY25, resulting in a continued build-up of the channel inventory.

 

“Sales of electric vehicles were additionally impacted by the lapse of certain subsidies. We moderated our offtake in Q2 to keep our channel inventory under control. This quarter has started with resurgence in industry demand on the back of a robust festival season. Tata Motors recorded its highest ever monthly registrations of around 685,00 during October, which helped in bringing down the inventory to normal levels,” Chandra added.