Tata Motors Q2FY25 net profit falls 11% YoY to Rs 3,343 cr on weak JLR performance

Consolidated revenue for the July-September quarter fell 3.5% on year to Rs 101,500 crore, largely impacted by lower sales volumes, according to the statement filed with the stock exchanges.

The company posted an EBITDA of Rs 11,600 crore, representing an EBITDA margin of 11.4%, down by 230 basis points (bps) compared to the previous year.

EBIT for the quarter stood at Rs 5,600 crore, marking a 5.6% margin, which is a decrease of 190 bps.

Profit Before Tax (PBT) before exceptional items came in at Rs 5,800 crore, down by Rs 391 crore, while net profit was reported at Rs 3,500 crore.

For the first half of FY25, Tata Motors achieved a PBT (bei) of Rs 14,600 crore, an increase of Rs 2,900 crore over the same period last year, underlining the company’s robust year-to-date performance.

Jaguar Land Rover (JLR), Tata Motors’ UK-based subsidiary, saw a 5.6% drop in revenue, reaching £6.5 billion.

This decline was attributed to temporary supply constraints impacting production, leading to a reduction in EBIT margins to 5.1%, down by 220 bps.

In the commercial vehicle (CV) segment, revenues declined by 13.9%; however, the EBITDA margin rose to 10.8%, up by 40 bps, driven by favourable pricing and material cost savings despite lower volumes.

Passenger vehicle (PV) revenue fell by 3.9%, with EBITDA margins remaining relatively stable at 6.2%, down

by 30 bps, as the segment benefited from product mix improvements and cost reduction measures.

Looking forward, Tata Motors remains cautious about short-term domestic demand but anticipates the festive season and significant infrastructure investments to support growth.

JLR is expected to see a marked improvement in wholesales as supply issues resolve, contributing to a stronger performance outlook for the second half of FY25.

The company also reiterated its goal of achieving net debt-free status by the end of the fiscal year.

PB Balaji, Group Chief Financial Officer of Tata Motors, commented on the quarter’s performance, stating, “Growth in the quarter was impacted due to significant external challenges as highlighted earlier. Overall, the business fundamentals remain strong, and we remain focused on our agenda of driving growth, competitiveness and free cash flows. As the supply challenges ease and demand picks up, we are confident of steady improvement in our performance and delivering a strong H2.”

JLR Q2FY25 performance

Jaguar Land Rover (JLR) reported Q2 FY25 revenue of £6.5 billion, a 5.6% decline from the previous year, with an EBITDA margin of 11.7%, down by 320 basis points (bps), and EBIT margin at 5.1%, down by 220 bps.

PBT before exceptional items was recorded at £398 million for the quarter. In the first half of FY25, JLR’s revenue was flat at £13.7 billion, while EBITDA margin stood at 13.9% (down 170 bps) and EBIT margin at 7.1% (down 90 bps), with a PBT (bei) of £1,091 million.

The company's profitability faced headwinds due to a temporary aluminum supply constraint and a quality control hold on 6,029 vehicles, which affected production volumes.

JLR, however, anticipates a strong recovery in production and wholesale volumes in the second half of FY25.

At the close of Q2, JLR held a cash balance of £3.4 billion, with net debt standing at £1.2 billion and gross debt at £4.6 billion.

The total liquidity position, including a recently refinanced £1.6 billion undrawn revolving credit facility, reached £4.9 billion.

For the full fiscal year, JLR maintains its revenue target of around £30 billion, an EBIT margin of at least 8.5%, and a positive net cash position.

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Jaguar Land Rover (JLR) has invested over £250 million in electric vehicle (EV) production at its Halewood facility as part of a planned £500 million investment.

This includes the installation of advanced EV production lines and automated robotics aimed at enhancing EV manufacturing capacity. Additionally, JLR's Engine Manufacturing Centre (EPMC) in Wolverhampton is now producing V8 engines to cater to the demand for a complete range of powertrains—ICE, PHEV, and BEV—for the Range Rover and Range Rover Sport models. Meanwhile, the joint venture with Chery for the Freelander brand in China is progressing positively.

Outlook

JLR anticipates a strong recovery in production and wholesale volumes in the second half of the fiscal year as aluminum supply issues are expected to ease.

The company maintains its guidance for FY25 with targeted revenue of approximately £30 billion, an EBIT margin of at least 8.5%, and a positive net cash position by year-end.

Jaguar Land Rover (JLR) has invested over £250 million in electric vehicle (EV) production at its Halewood facility as part of a planned £500 million investment.

This includes the installation of advanced EV production lines and automated robotics aimed at enhancing EV manufacturing capacity.

Additionally, JLR's Engine Manufacturing Centre (EPMC) in Wolverhampton is now producing V8 engines to cater to the demand for a complete range of powertrains—ICE, PHEV, and BEV—for the Range Rover and Range Rover Sport models. Meanwhile, the joint venture with Chery for the Freelander brand in China is progressing positively.

Financial Performance

JLR posted its eighth consecutive profitable quarter, overcoming temporary aluminum supply constraints.

Quarterly revenue for Q2 FY25 stood at £6.5 billion, a 5.6% decrease year-on-year, while H1 FY25 revenue was flat at £13.7 billion.

The EBIT margin for Q2 FY25 was recorded at 5.1%, down 220 basis points (bps) from Q2 FY24, whereas the EBIT margin for H1 FY25 reached 7.1%.

The decrease in profitability reflects reduced wholesales, higher vehicle marketing expenses (VME), and increased selling costs.

However, these were partially offset by a focus on Range Rover production and improvements in material costs.

Profit before tax (PBT) for Q2 FY25 was £398 million, down from £442 million the previous year, while H1 FY25 PBT grew 25% year-on-year to £1,099 million. Free cash flow was negative at £(256) million for the quarter, primarily due to production limitations.