Tata Motors Q1FY24 Results: Registers ₹3,202 Crore Net Profit, Surpasses ₹1 Lakh Crore Revenue Mark

Automobile major Tata Motors reported its first-quarter results for fiscal year 2023-24 (Q1FY24) on July 25, with a consolidated net profit of ₹3,202 crore. The company’s revenue from operations surged by 42% to ₹102,236.08 crore in the June quarter, surpassing the significant ₹1 lakh crore milestone in line with market expectations. The robust earnings were driven by improving margins and strong sales in its luxury arm, Jaguar and Land Rover (JLR). Tata Motors also reported a record free cash flow (FCF) of £451 million for Q1, while the cumulative FCF over the last three quarters stood at £1.8 billion.

Tata Motors Announces Share Issuance and Reduction of ‘A’ Ordinary Shares:

Tata Motors also revealed plans to issue seven fully paid-up new ordinary shares with a face value of ₹2 for every 10 ‘A’ ordinary shares with a face value of ₹2. This issuance will serve as consideration for the reduction and cancellation of the ‘A’ ordinary shares, offering a 23% premium for every ‘A’ share.

Positive Outlook and Performance Across Automotive Verticals:

PB Balaji, Group Chief Financial Officer, Tata Motors, expressed optimism about the company’s performance in FY24, stating that all automotive verticals delivered strong performances. The distinct strategies employed by each business are delivering consistent results and making them structurally stronger. The company remains confident of sustaining this momentum throughout the year and achieving their stated goals.

JLR’s Strong Financials and Leadership Changes:

Jaguar Land Rover (JLR) reported a robust order book of 185,000 units, with Range Rover, Range Rover Sport, and Defender models representing 76% of the orders. Adrian Mardell was appointed as JLR’s Chief Executive Officer, reflecting the company’s commitment to its Reimagine strategy and transition to an electric and digitally savvy modern luxury business.

Tata Motors’ Commercial Vehicle Division Performance:

Tata Motors’ Commercial Vehicle (CV) sales faced a slowdown in Q1, with domestic sales declining by 14.1% compared to the same quarter last year. However, the company remains positive about the CV industry’s future due to the promising monsoon and continued infrastructure push by the Government.

Market and Analyst Expectations:

Market analysts expected Tata Motors to report a net profit of ₹3,151.4 crore in Q1, with revenue expected to grow by 36% YoY to ₹98,080.6 crore. The operating profit (EBITDA) surged over fivefold to ₹13,218 crore, with an operating margin expansion of 700 basis points to 14.4% in the June quarter.

Tata Motors Shares Hit 52-Week High:

Tata Motors’ share price reached a 52-week high of ₹641.50 apiece on the BSE ahead of the Q1 results, marking an impressive rally this year with a 64% YTD gain.

Outlook and Earnings Estimate Upgrades:

Brokerage houses like Emkay Global and Motilal Oswal expect strong operating performance from Tata Motors, with projected EBITDA margin expansions and healthy volume growth for JLR. As a result, earnings estimates for FY24 and FY25 have been raised, boosting confidence in the Indian business and JLR’s electric future strategy.