Tata Motors India Limited, the best performing Nifty 50 constituent so far this year, on Tuesday, reported a consolidated net profit of Rs 3,202.80 crore in the first quarter ended June 2023, on the back of robust sales of its luxury car unit Jaguar and Land Rover (JLR). The Mumbai-based auto major had reported a net loss of Rs 5,006.60 crore in the corresponding quarter of the previous fiscal.

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A CNBC-TV18 poll of analysts had anticipated the profit figure at Rs 2,656 crore.

Consolidated revenue for the quarter increased 42.5 percent year-on-year to Rs 101,528 crore in the period under review from Rs 71,227.76 crore in the year-ago period, Tata Motors said in a regulatory filing. This was in line with the Street expectations of Rs 1.01 lakh crore.

The auto maker's consolidated earnings before, interest, tax, depreciation, and amortization (EBITDA) surged more than fivefold YoY to Rs 13,218 crore. Operating margin, meanwhile, expanded by a whopping 860 basis points YoY to 13 percent as against 4.4 percent in the year-ago period.

JLR segment

Tata Motors British arm JLR reported a 57 percent YoY increase in sales at 6,903 million pounds.

JLR's operating margin, calculated as earnings before interest and taxes (EBIT) was at 8.6 percent for the quarter under review, up 6.5 percent from the previous March quarter.

The higher profitability year-on-year reflects favourable volume, mix, pricing and foreign exchange revaluation offset partially by higher inflation and supplier claims, the company said in a statement.

Free cash flows of 451 million sterling in the quarter, were the highest ever that JLR has recorded in this period. The cumulative free cash flows over the last three quarters was 1.8 billion sterling.

As a result, cash in hand increased to 4 billion sterling, while the net debt reduced to 2.5 billion sterling as of June-end.

JLR: Q2 production, cashflow may be lower than Q1

The second quarter production and cashflow is expected to be lower than the June quarter, reflecting the annual summer plant shutdown while wholesales and profitability are expected to be more in line with recent quarters.

“I am pleased to report a third consecutive quarter of strengthening financial performance for JLR. We have had a strong start to the financial year and delivered our highest production levels in nine quarters and our highest Q1 cashflow on record. This is testament to the thousands of determined people in the business working tirelessly to deliver every aspect of our Reimagine strategy,” Adrian Mardell, JLR Chief Executive Officer, said.

Tata CV division

Apart from seasonality, Q1 of FY24 for the commercial vehicles (CV) industry was impacted by the transition to BS 6 Phase 2 emission norms. Domestic CV volumes were 82.4K units, down 14.1 percent YoY. Exports were at 3.6K units, down 32 percent YoY because of subdued economic conditions in overseas markets as well.

However, HCV volumes grew 9 percent YoY driven by the strong infrastructure push by the Government, as well as increased activity in e-commerce, construction, and replacement demand in auto logistics and petroleum sector.

Despite the drop in volumes, the revenues improved by 4.4 percent to Rs 17,000 crore on account of improved mix and better market operating price. The business witnessed strong EBITDA and EBIT margins of 9.4 percent and 6.5 percent, respectively, in Q1 FY24.

Tata Motors PV

The passenger vehicle segment posted a 11 percent increase in revenue, driven by improved pricing. However, operating margin dipped 80 basis points to 5.3 percent, on the back of a higher mix of electric vehicles and higher fixed expenses.

Domestic wholesale sales grew 7.6 percent YoY during the quarter, and retail sales grew 6 percent.

Shares of Tata Motors were trading nearly 2 percent higher, at a record high of Rs 640.35, ahead of the Q1 earnings announcement. On a year-to-date basis, the stock has risen 62.20 percent, while it has jumped 42.42 percent in the last one year.

First Published:Jul 25, 2023 3:52 PM IST