Tata Motors Q3 profit declines 22% YoY to Rs 5,451 crore, JLR slowdown weighs on margins

Tata Motors reported a 22 per cent year-on-year drop in consolidated net profit to Rs 5,451 crore for Q3 FY25, missing analyst estimates. The performance was hit by weaker margins and lower Jaguar Land Rover (JLR) volumes, despite a sequential improvement.

Revenue growth muted, margins under pressure

The company's revenue from operations grew 2.7 per cent YoY to Rs 1,13,575 crore, supported by a modest increase in sales. However, earnings before interest, tax, depreciation, and amortization (EBITDA) margins declined by 60 basis points to 13.7 per cent. On the positive side, earnings before interest and tax (EBIT) rose to Rs 10,000 crore, reflecting a 60 basis point improvement.

Ahead of the results announcement, Tata Motors’ stock closed 3.3 per cent higher at Rs 752.5 on the NSE.

JLR delivers record revenue but profit declines

Jaguar Land Rover, the luxury vehicle subsidiary, recorded its highest-ever quarterly revenue at GBP 7.5 billion, a 1.5 per cent rise YoY. EBIT margin improved to 9 per cent, marking a decade-high, but EBITDA margin contracted by 200 basis points to 14.2 per cent. JLR’s profit before tax (before exceptional items) stood at GBP 523 million, down from GBP 627 million a year ago. While supply chain conditions improved, demand remained sluggish, particularly in China.

Commercial and passenger vehicle segments face headwinds

Commercial Vehicles (CV): Revenue declined 8.4 per cent YoY to Rs 18,431 crore due to weaker volumes and an unfavourable product mix. However, EBITDA margins improved by 130 basis points to 12.4 per cent, supported by material cost savings and Production Linked Incentive (PLI) scheme benefits.

Passenger Vehicles (PV): The segment’s revenue dropped 4.3 per cent YoY to Rs 12,354 crore, but EBITDA margin increased by 120 basis points to 7.8 per cent. While EV sales in the personal segment grew 19 per cent YoY, fleet sales were impacted by the expiry of FAME II subsidies.

Financial performance and outlook

Tata Motors’ profit before tax (before exceptional items) declined slightly to Rs 7,700 crore, while automotive free cash flow stood at Rs 4,700 crore, supported by improved volumes. Finance costs reduced by Rs 760 crore to Rs 1,725 crore due to lower gross debt.

The company expects demand to improve gradually, backed by infrastructure investments, new product launches, and stable interest rates. JLR’s wholesale volumes are likely to rise in Q4, though demand concerns in China persist.

“Our fundamentals remain strong, and despite external challenges, we are confident of delivering another strong performance this year,” said PB Balaji, Group CFO, Tata Motors.