Tata Motors reports decline in Q4 profit amidst tax credit impact, JLR profitability challenges

Mumbai: Tata Motors' consolidated net profit more than halved in the March quarter due to the impact of a deferred tax credit of ₹9,000 crore in the year-ago period and an exceptional item of ₹566 crore in the latest quarter.

Profit at the Tata Group automotive flagship fell to ₹8,470 crore from ₹17,407 a year earlier. Revenue increased nominally by 0.4% to ₹1,19,502 crore.

Profit, however, surpassed the ₹7,662.3 crore estimate in a Bloomberg poll of brokerages, which forecast a revenue of ₹1.2 lakh crore.

Course Correction
Consolidated ebitda margin contracted by 60 basis points to 14% last quarter, reflecting lower profitability at UK subsidiary, Jaguar Land Rover (JLR) where the margin shrank by 100 basis points to 15.3% last quarter.

On the other hand, Tata Motors' domestic passenger vehicle and commercial vehicle segments reported margin expansion of 60 basis points and 20 basis points to 7.9% and 12.2%, respectively.

"It has been a record year in terms of the revenues, ebitda and investment. The geopolitical situation at this point is a bit challenging but we will continue to deliver on our strategy with a little bit of course correction here and there," said PB Balaji, Group CFO.

Commenting on the impact of UK's trade pacts with the US and India, he said, "A 10% tariff is higher than the earlier 2.5% duty (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."

UK's FTA with India also bodes well for JLR. While the Range Rover assembled in India as CKD will remain unaffected, future imports may benefit, he noted.

Tata Motors turned net auto cash positive in FY25 with a cash balance of Rs 1,000 crore. For the full year ended on March 31, it reported a record revenue of Rs 439,700 crore, up 1.3% YoY aided largely by the Indian rupee's depreciation against the British pound, and strong sequential recovery in the fourth quarter. The company has announced a dividend of Rs 6 per share.

Sales volumes at JLR rose 1.1% during the quarter, led by strong demand for its SUVs in North America and Europe. While revenue at the British luxury car unit fell 1.7% to 7.7 billion, full-year profit before tax reached 2.5 billion, the best in a decade.

Tata Motors has outlined an investment of 18 billion in JLR over a five-year period. Balaji said it would be funded by operational cash flows.

Commenting on the company's electric car sales in the domestic market, Balaji said Tata Motors sold about 65,000 e-cars, down 13% YoY. He attributed the decline to lower sales to fleet operators. The company's EV market share fell to 55.4% in FY25 from 73.1% a year ago, and from a peak of 83.9% in FY23.

"The impact is visible. To address this, we have several interventions planned - starting with the Harrier EV launch and the upcoming Curvv EV. We're also making improvements to existing models," he said.