Tata Motors Q4FY25 profit drops 51%, flags challenges amid tariff war

Deferred tax gain and exceptional costs dent Q4 profit for Tata Motors, though FY25 revenue and PBT hit record highs amid global challenges and tariff uncertainties

Automotive (auto) major Tata Motors posted a 51 per cent drop in consolidated net profit for the January–March quarter (Q4) of 2024-25 (FY25), to ₹8,470 crore, due to a deferred tax asset of almost ₹9,000 crore in the corresponding quarter of the previous financial year and an exceptional item of ₹566 crore during the quarter. Revenue was up just 0.5 per cent year-on-year (Y-o-Y) at ₹1.18 trillion for Q4FY25.

 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) for Q4FY25 fell 4.1 per cent to ₹16,700 crore, while profit before tax (PBT) and exceptional items rose by ₹2,500 crore to ₹12,100 crore.

 

 

P B Balaji, group chief financial officer, Tata Motors, said Q4 profit after tax (PAT) was lower as last year’s figure included a deferred tax asset of nearly ₹9,000 crore, even as PBT was higher. On a consolidated basis, the auto business is now debt-free, which has helped reduce interest costs.

 

Tata Motors beat Bloomberg analysts’ estimates for PAT, while the revenue forecast was missed by a small margin. The stock fell 1.76 per cent on the BSE on Tuesday.

 

Tata Motors welcomed the US–UK free trade agreement (FTA), saying that while the fine print on timelines was awaited, the deal was directionally on the right track.

 

“A 10 per cent tariff is higher than the earlier 2.5 per cent duty (Jaguar Land Rover/JLR was paying when shipping to the US). We are putting in a plan for cost at JLR and will maintain a heightened vigil on costs and cash. We will begin to see the benefits of the tariffs in the coming quarters,” Balaji said. The India–UK FTA augurs well for JLR, Balaji said. The Range Rover range made in India as completely knocked down units would not be impacted, but future models shipped to India would benefit. 

 

Tariffs and related geopolitical actions are making the operating environment uncertain and challenging, the company said, adding that the global premium luxury segment and Indian domestic markets were expected to weather this relatively better.

 

For the full year, Tata Motors reported record revenue of ₹4.36 trillion, up from ₹4.31 trillion in the previous year, with an Ebitda of ₹57,600 crore and the highest-ever PBT and exceptional items of ₹34,300 crore (up ₹5,000 crore over the previous year). Net profit for the full year was down 11.3 per cent Y-o-Y to ₹27,830 crore.

 

Tata Motors turned net auto cash positive in FY25, with a net cash balance of ₹1,000 crore. 

 

“Lower depreciation and amortisation at JLR, better commercial vehicle (CV) profitability, and savings in interest cost were partially offset by lower volumes and lower operating leverage,” the company said.

 

JLR posted Q4 revenue of 7.7 billion pounds, down 1.7 per cent, while FY25 revenue was flat at 29 billion pounds. This marked JLR’s 10th consecutive profitable quarter. It reported free cash flows of 1.5 billion pounds for FY25 and turned net cash positive. The Jaguar Type 00 — a new electric four-door GT concept car — is being revealed globally in phases and is heading to Mumbai soon.

 

It has already received 32,000 expressions of interest.

 

The Range Rover Electric development programme continues, with winter testing in Arjeplog, Sweden, as its waiting list exceeds 61,000 units.

 

JLR’s investment spend will remain at 18 billion pounds over five years and will be funded through operational cash flows.

 

CV volumes were down 4.8 per cent in Q4, while exports rose 29.4 per cent. Revenue from the CV business declined 0.5 per cent, while PBT before exceptional items rose by ₹89 crore to ₹2,073 crore. The Ebitda margin of 12.2 per cent was up 20 basis points Y-o-Y.

 

“Looking ahead, with most macroeconomic indicators on track, improved fleet utilisation, and a stable sentiment index, we anticipate sustained growth despite global headwinds,” Tata Motors said. It launched the first-ever trials of hydrogen-powered heavy-duty trucks — 16 trucks will drive across key freight corridors.

 

Passenger vehicle revenue was down 13 per cent in Q4 to ₹12,500 crore, while PBT before exceptional items declined by ₹144 crore to ₹389 crore. Tata Motors had a 13.2 per cent Vahan registration market share in FY25 and maintained leadership in electric vehicles (EVs) with a 55.4 per cent share, despite increased competition.

 

EVs accounted for 11 per cent of sales, while compressed natural gas (CNG) made up 25 per cent in FY25. Sport utility vehicles, CNG, and EVs will remain key growth drivers, the company said. While fleet sales were down, the company expects to boost private segment buying with the upcoming launches of the Tata Harrier and Tata Sierra EVs.

 

FY26 capex at similar level as FY25

 

Tata Motors said that its capital expenditure plans for FY26 are at similar levels as the previous year. PB Balaji, group CFO, Tata Motors said that the capex would be at  ₹8,400 crore for Tata Motors (domestic arm), and 3.8 billion pounds for Jaguar Land Rover. The company also said that JLR investments would remain at around 18 billion pounds over a 5 year period and will be funded by operational cash flows.