Tata Motors’ record-breaking FY24 performance demonstrates the effectiveness of its strategic initiatives and its ability to navigate challenging market conditions.

MUMBAI (India CSR): Tata Motors Ltd. (TML) announced exceptional financial results for the fiscal year 2024, achieving record-breaking figures in revenue, profitability, and cash flows. The company’s strong performance is attributed to robust growth across all its automotive businesses, including Jaguar Land Rover (JLR), Tata Commercial Vehicles (Tata CV), and Tata Passenger Vehicles (Tata PV).

Financial Highlights: A Year of Unprecedented Growth

Record Revenue: TML achieved its highest-ever consolidated revenue of Rs. 437,928 crore, marking a 26.6% increase compared to the previous fiscal year.

Strong Profitability: The company’s consolidated EBITDA and EBIT margins witnessed significant improvement, reaching 14.3% and 8.3% respectively, demonstrating enhanced operational efficiency.

Profit Surge: TML reported a consolidated profit before tax (PBT) of Rs. 28,932 crore, a substantial increase from Rs. 1,803 crore in FY23. The consolidated profit after tax (PAT) stood at Rs. 31,807 crore, highlighting the company’s robust financial health.

Debt Reduction: Net automotive debt reduced significantly to Rs. 16,000 crore, with the company on track to become net automotive debt-free on a consolidated basis in FY25.

Free Cash Flow: TML generated a record-breaking free cash flow of Rs. 26,900 crore, demonstrating its strong cash generation capabilities.

Indian CV industry grew by a modest 2% in volumes during FY24

Girish Wagh, Executive Director said, “With promising GDP growth outlook, incentives from government to improve productivity in both manufacturing and agriculture sectors, and continuing focus on infra, demand for CV’s is expected to improve from H2 FY25. We remain cautiously optimistic about domestic demand while keeping a close watch on geopolitical developments, interest rates, fuel prices and inflation. We will continue to deliver strong EBITDA performance and focus on net cash will continue.

“The Indian CV industry grew by a modest 2% in volumes during FY24, impacted by a high base effect of FY23, elections held across 5 states and the announcement of general elections. At Tata Motors, we strengthened our portfolio with the introduction of new passenger and cargo mobility solutions, stepped-up the thrust on digitalization, enriched customer engagement and experience with stronger partnering and made holistic progress on our sustainability agenda.”

“Our sharp focus on profitable growth resulted in the CV business recording its highest-ever revenues of Rs, 78.8K Cr and profits of Rs, 6.1K Cr in FY24. Going forward, we will intensify our efforts to grow market share, profitably and consistently, in every business segment by delivering more value to customers with innovative products, smarter services and holistic mobility solutions.”, he added.

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Business Unit Performance: Growth Across the Board

Jaguar Land Rover

JLR achieved its highest-ever full-year revenue of £29.0 billion and a PBT of £2.2 billion. The luxury carmaker also recorded a record free cash flow of £2.3 billion.

Record Range Rover wholesale and retail sales for Q4 and FY24.
Range Rover Electric generating strong interest with over 28,700 sign ups to the waiting list
Range Rover SV demand more than doubles to 4,099 units in FY24, including sale of 20 Range Rover SV Bespoke Sadaf editions which sold out at around £330,000 each.
New Defender OCTA to be revealed on July 3, 2024 with prospective clients invited to one of seven exclusive events to experience the product.
Investment of £356m in Electric Propulsion Manufacturing Centre in Wolverhampton, UK, installing equipment to manufacture battery packs and electric drive units.
Launched three new JLR Insurance products to support UK clients, as part of JLR financial services offering.
New Range Rover Electric and new Jaguar prototypes currently undergoing cold weather testing.
Energy storage systems using second life Range Rover, Range Rover Sport PHEV and I-Pace batteries, developed.

JLR continued its strong financial performance trend in the financial year, with another record-breaking quarter in Q4 FY24. Revenue for the quarter was £7.9 billion, up 11% versus Q4 FY23 and up 6% versus Q3 FY24. Revenues for FY24 were £29.0 billion – JLR’s highest ever full year revenue and up 27% compared to the prior year.

PBT (bei) in Q4 was £661 million (+£293 million yoy) and EBIT margin was 9.2% in Q4, (+270bps yoy). The higher profitability yoy reflects increased volumes and reduced material costs, offset partially by increased marketing spend compared to a year ago. Profit after tax (“PAT”) in Q4 was £1.4 billion vs a profit of £259 million in the same quarter a year ago. PBT for FY24 was £2.2 billion – the highest since FY15; and PAT for FY24 was £2.6 billion. PAT also factors in the recognition of a deferred tax asset (DTA) of £1.0 billion due to a reassessment of future recoverability tax losses and allowances.

Free cash flow for the quarter was £892 million and £2.3 billion for the full year, the highest ever full year cash flow. The year ended with a cash balance was £4.2 billion and net debt £0.7 billion and a total liquidity was £5.7 billion, including the £1.5 billion undrawn revolving credit facility maturing April 1, 2026.

Tata Commercial Vehicles

Tata CV reported its highest-ever revenue and profit, reaching Rs. 78,800 crore and Rs. 6,102 crore respectively. The business unit maintained its strong market leadership in the Indian commercial vehicle segment.

Highlights

Q4 FY24 revenue at Rs. 21.6K Cr (+1.6%), EBITDA 12.0% (+190 bps), EBIT 9.6% (+100 bps), PBT (bei) ₹ 2.0K Cr.
FY24 revenue at Rs. 78.8K Cr (+11.3%), EBITDA 10.8% (+340 bps), EBIT 8.2% (+300 bps), PBT (bei) ₹ 6.1K Cr.
Domestic Vahan market share at 39.1% in FY24. HGV+HMV 48.8%, MGV 37.5%, LGV 34.3%, Passenger 35.0%. Truck market share continues to remain strong; SCV market share starting to improve.

Over 140 products and 700 variants introduced in FY24. BS VI Phase 2 vehicle portfolio equipped with smarter technologies to deliver even better performance and value.
Introduced technologically advanced, highly fuel efficient and reliable Turbotronn 2.0 engine, for 19-42 tonne range.
Launched all-new Intra V70 pickup, Intra V20 Gold pickup and Ace HT. Introduced Tata Magic bi-fuel.
Fleet edge, the connected vehicle platform has now more than 600K vehicles.

Green transformation continues

Showcased India’s 10 most advanced, efficient and eco-friendly CV’s at Bharat Mobility Global Expo 2024, including Prima 5530.S LNG, industry first H2ICE truck, E-mobility concept tipper, Magna EV, Ace and Intra bi-fuel.
Delivered green-fuel powered CV’s to Tata Steel. The fleet includes Prima tractors, tippers and the Ultra EV bus, powered by LNG and battery electric technologies.
TCPL Green Energy Solutions inaugurated facility to produce Hydrogen based internal combustion engines.
Unveiled 2 state-of-the-art facilities for development of Hydrogen propulsion technologies.
Over 4300 ACE EV’s plying delivering 99% uptime resulting in repeat purchases. Higher payload variant launched.
2600+ EV buses are operational. TML e-bus fleet cumulatively crossed 140 million Kms with >95% uptime.

Financials

In Q4 FY24, domestic wholesale CV volumes were 104.6K units, lower 7% yoy on account of increased pre-buy in Q4 FY23 due to BS6 Phase II transition. Exports were at 4.5K units increasing 13% yoy. However, revenues improved by 1.6% yoy to Rs. 21.6K Cr on account of improved pricing and lower VME’s. EBITDA and EBIT margins of 12.0% (up 190 bps yoy) and 9.6% (up 100 bps yoy), respectively were delivered. For the full year, while overall volumes declined by 4%, HCV volumes increased by 5%.

Tata Passenger Vehicles

Tata PV achieved its highest-ever turnover and profit, with revenue reaching Rs. 52,400 crore and PBT at Rs. 1,423 crore. The company solidified its position as a leading player in the Indian passenger vehicle market, particularly in the electric vehicle (EV) segment.

Highlights

Q4 FY24 revenue at Rs 14.4K Cr (+19.3%), EBITDA 7.3% (flat yoy), EBIT 2.9% (+150 bps), PBT (bei) Rs 0.5 K Cr.
FY24 revenue at Rs 52.4K Cr, (+9.4%), EBITDA 6.5% (+10 bps), EBIT 2.0% (+100 bps), PBT (bei) Rs 1.4 K Cr.
VAHAN registration market share increased to 13.9% in FY24. #2 player in H2 FY24 with 14.3% market share.
Strong market leadership in EV at 73.1% despite increase in competition. EV penetration at 13%, CNG at 16% in FY24.
Introduced twin cylinder iCNG technology in Tiago, Tigor, Punch, and Altroz enabling no compromise on boot space.
Revolutionized the CNG segment in the country by introducing AMT in its CNG cars.
Strong response to facelifted Nexon, Harrier and Safari – significant design changes and several futuristic technologies.
New Nexon, Safari and Harrier receive GNCAP 5-star rating for both adult and child occupant protection. New Safari and Harrier secured highest score by an Indian Car in GNCAP and also became first recipients of BNCAP’s 5-star rating.
Commenced production at its state-of-the-art new facility in Sanand, Gujarat.

Green transformation continues

Range of Nexon.ev extended to 465 kms. Strong response to Nexon.ev facelift.
TPEM introduced new brand identity “Tata.ev” for the EV business, embodying the core philosophy of “Move with Meaning,” unifying the values of sustainability, community, and technology.
Announced platform-sharing partnership with JLR to accelerate development of ‘premium electric’ series ‘Avinya’.
Introduced advanced Pure EV architecture – acti.ev which will underpin future products from the TPEM portfolio.
Introduced first car “Punch.ev” on the acti.ev architecture.
Inaugurated exclusive TATA.ev stores in Gurugram, offering an immersive experience for the EV community.
Signed MOUs with charging point operators and OMC’s for setting up 22,000+ chargers in next 12-18 months.

Financials

In Q4, PV volumes were at 155.6K units (+14.8% yoy) supported by new SUV facelifts and multiple power trains. Nexon continued to be the highest selling SUV in FY24 and along with the Punch was amongst top 5 models sold in India. Revenues in Q4 were up 19% yoy at Rs 14.4K Cr, while EBIT margins improved by 150 bps yoy to 2.9% owing to operating leverage on improved volumes and savings in commodity costs. In Q4, PV (ICE) business delivered double digit EBITDA margins and EV business was EBITDA positive (before R&D spends) at 1.1%. On full year basis, the PV business delivered ~9% revenue growth and highest ever PBT (bei) at Rs 1.4K Cr (+Rs 0.7K Cr yoy).

Shailesh Chandra, Managing Director TMPV and TPEM

Shailesh Chandra, Managing Director TMPV and TPEM said, We expect the demand for passenger cars to remain strong, although the high base effect, coupled with extraneous factors elections, heat wave, etc. may keep the growth rate moderate. We will continue to focus on retails and deliver market beating growth to sustain double digit EBITDA margins and positive free cash flows for PV business. We will continue to proactively drive EV penetration through new product launches and ecosystem development and improve profitability.

“Passenger vehicle sales in India set a record in FY24 with over 4.2 million units sold, driven by SUVs (50% of overall sales) and emission-friendly powertrains. Tata Motors recorded its third consecutive year of highest sales volumes with 6% growth in wholesales and 10% in retail sales over FY23. Our multi-powertrain approach and sharp focus on green technologies increased the penetration of CNG and electric vehicles to 29% in the overall portfolio. We sold 73.8K EVs during the year (up 48% vs FY23) and crossed milestone of 150,000 cumulative EV production. Overall, the business recorded its highest-ever turnover with annual volumes of 573.5K units, growing by 6.0% over FY23, and recorded highest ever profits of Rs, 1.4K Cr.”, he further added.

Looking ahead

We will continue to focus on brand activation to maintain order book. We expect EBIT margins in FY25 to be around the FY24 level. We anticipate a modest increase in investment spend to £3.5b but still expect to become net debt zero during FY25.” Adrian Mardell, JLR Chief Executive Officer, said.

“This has been a year of great strategic progress at JLR and I would like to thank our clients, our people, our suppliers and partners for their role in our success. We have delivered a record financial performance for the company, generating free cashflow of £2.3 billion, enabling us to reduce net debt to £0.7 billion. The foundation of this performance was the sustained global demand for our modern luxury vehicles, led by our Range Rover and Defender brands, underpinned by a consistent focus on operational improvement.” he said.

“We are entering the next exciting phase of our Reimagine strategy which will see us bring to life our modern luxury electric vehicles and deliver an accompanying modern luxury experience for our clients, ensuring we continue to vigorously address the challenges we have encountered in 2024.”, further added.

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Leadership Reflecting Confidence and Future Outlook

PB Balaji, Group Chief Financial Officer of Tata Motors, expressed his satisfaction with the company’s performance, “It is pleasing to report the FY24 results during which Tata Motors Group delivered its highest ever revenues, profits, and free cash flows. The India business is now debt free, and we are on track to become net automotive debt free on a consolidated basis in FY25. The businesses are executing well on their distinct strategies and therefore, we are confident of sustaining this strong performance in the coming years.”

Looking ahead, Balaji remarked: “We remain cautiously optimistic on domestic demand over the full year and expect H1 to be relatively weaker. The premium luxury segment demand is likely to remain resilient despite emerging concerns on overall demand. Despite this, we are confident of delivering a strong performance in FY25.”

(India CSR)