Tata Motors’ shares are in the spotlight because the company revealed its earnings for the third quarter (Q3) on January 30. The company’s profit fell by 22% compared to last year, landing at Rs 5,451 crore. This was a big miss from what experts expected, which was Rs 6,791 crore.
On a brighter note, Tata Motors’ revenue from sales grew by 3% from last year, totaling Rs 1.13 lakh crore. The company also reported strong earnings before taxes (EBITDA) of Rs 15,500 crore, showing improvement as previous supply problems got better. Compared to the previous quarter, the profit actually jumped by 63%, as they made Rs 3,343 crore last time.
PB Balaji, the Group CFO of Tata Motors, said, “The business is strong, and despite some difficulties, we believe we can perform well this year.”
Looking at specific segments, commercial vehicle (CV) sales were down by 8.4% from last year to Rs 18,400 crore. However, profit margins improved due to decreased costs and government incentives.
Passenger vehicles saw steady sales, hitting 1,40,000 units. Revenue from these vehicles dropped by 4.3% from last year, but profit margins improved thanks to cost-saving measures.
In the electric vehicle (EV) segment, Tata Motors saw a 19% growth in the personal vehicle market, even though fleet sales fell due to the end of a government subsidy.
Tata Motors’ luxury brand, Jaguar Land Rover (JLR), performed well in Q3. They reported record revenue of £7.5 billion, up by 1.5% from last year. Year-to-date revenue of £21.2 billion was stable. Profit before tax was £523 million, down from £627 million last year. JLR had a higher profit margin, benefiting from increased vehicle sales and lower costs.
In response to these results, brokerage firm Nuvama kept a ‘Reduce’ rating on Tata Motors, lowering the target price from Rs 750 to Rs 720. They noted that Q3 results did not meet expectations due to lower sales prices and margins, particularly in JLR and the Indian CV sector. They also cut their forecast for JLR revenue by 3% for the year and expect only modest growth for Tata Motors overall in the coming years.
(Disclaimer: The opinions expressed by experts are their own and do not reflect the views of Thellv.news)
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