New Delhi Tata Motors Ltd, the parent of UK luxury car maker Jaguar Land Rover (JLR), reported a consolidated net profit on Friday. 5,408 crore for the quarter ended March, and declared a dividend of Rs. 2 per equity share, its first since 2016 when it paid a dividend 0.20 per share.
The company had a net loss 1,032 crore in the year-ago quarter.
A confluence of improving market conditions, easing supply-side challenges for JLR and a focused-cost reduction program have resulted in Tata Motors posting a second consecutive quarter of profit in FY23, the first of its kind in the last two years before December Reversing the company’s loss streak. quarter.
Better-than-expected vehicle sales at JLR driven by easy chip shortages and strong demand, and a focus on profitable market share growth in the Indian commercial and passenger vehicle businesses, led to a 35% jump in revenue. 1.05 trillion for the quarter, the highest ever in a quarter for Tata Motors. It also saw the EBITDA margin break the quarterly record 14,100 crore, an increase of 210 basis points over a year ago.
Tata Motors also repaid a significant portion of its net automotive debt 13,100 crore in the quarter, the company’s net automotive loan in India at its lowest level in 15 years 6.2 crores. However, PB Balaji, group chief financial officer, Tata Motors, said in an interview that the automaker will not be able to achieve its target of zero net automotive debt by fiscal 2024, though he is “reasonably confident”. that the business will acquire. That target by FY25.
“In terms of net automotive debt, it is our intention to keep reducing it further and further and this year, we will get as close to net debt-zero as possible. For JLR, we currently have around £3 billion debt, which we’re guiding to reduce to around £1 billion or so. 10,000 crores; we owe another singapore debt 9,000 crores. So, we will not achieve the FY24 target of becoming net debt-free, but it is a matter of few quarters after that,” Balaji said.
“The debt reduction, as I’ve always been saying, is primarily from free cash flow to the business and we’ve proven again that we’ve been able to do it with one case in the quarter. Then there is monetization of non-core investments, Tata Technology DRHP has already been filed and we are waiting for approval, once we get approval subject to market conditions we will monetize this non-core investment Let’s monetize that which will enable us to clear out of our debt. But we won’t be able to hit that in FY24, but we’re actually quite confident of going net cash in FY25. Last option, if nothing else works out, we’d look at any strategic fundraising, like we did with TPG on the EV side. But at the moment we are not seeing it. We are focused on executing well on our strategy this year”, said Balaji.
Addressing concerns about the loss of market share in the commercial vehicle business, Balaji said Tata Motors will continue to focus on improving realizations in the CV business, but the month-on-month volumes should also continue to improve. While Tata Motors has gained month-on-month market share since H2HY23, it has registered year-on-year market share decrease for the last 6 consecutive months. CV volumes for Tata Motors were down 28% in April.
“The near term impact will be on advance purchase demand in Q4 FY23 in anticipation of price hike post BS VI Phase II. With the government’s continued thrust on infrastructure development, we remain optimistic about overall CV demand in FY24 despite near-term challenges on interest rates, fuel prices and inflation. We will continue to advance our demand-pull strategy and drive customer choice through innovation, quality of service and thematic brand activations. We will aim for higher recoveries and cost savings to secure double-digit EBITDA margins for FY24 and improve performance across all business verticals, the company said in a statement.
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