Tata Motors Limited
Q4 FY25
Call date · May 13, 2025
1 · Management Commentary
Key Positives
- Record high revenues and PBT before exceptional items for both Q4 and FY25.
- Net debt reduced from Rs. 43,000 crores (FY23) to net cash of Rs. 1,000 crores, reflecting strong deleveraging.
- JLR achieved net cash positive target, highest quarterly PBT in nine years (GBP 875 million), and strong free cash flow.
- Commercial Vehicles (CV) delivered highest ever PBT (Rs. 6,600 crores) and strong ROCE (37.7%).
- Passenger Vehicles (PV) SUV portfolio outperformed industry; Punch became India’s #1 SUV.
- Significant progress in digital initiatives (Fleet Edge, E-Dukaan, Fleet Verse).
- Dividend of Rs. 6 per share (300% of face value), all as ordinary dividend.
Key Negatives
- PV overall market share declined due to losses in the hatchback segment (Tiago, Altroz).
- JLR EBITDA fell 1% Q/Q and 1.6% Y/Y; China market remains challenging.
- PV profitability impacted by muted industry growth, high dealer inventory, and adverse realization.
- SCV market share declined; headwinds from commodity prices and new regulations (steel duty, AC regulation).
Forward Guidance
- Capex: JLR to maintain GBP 18 billion investment over five years (GBP 3.8 billion/year); PV+CV capex to remain around Rs. 8,400 crores, funded by operating cash flows.
- New products/segments: Launch of Ace Pro (SCV), Intra Gold series, Harrier and Safari petrol variants, Sierra (SUV), Harrier EV, Sierra EV, Altroz refresh, and continued expansion in digital and smart city mobility.
- Expected client wins/losses: Focus on regaining SCV market share and expanding in staff transportation and municipal deals.
- Revenue/margin outlook: Cautious due to tariff/geopolitical uncertainty; focus on cost reduction, value enhancement, and maintaining double-digit EBITDA margins in CV and targeting 10%+ EBITDA in PV.
- Other strategic initiatives: Demerger on track (appointed date July 1, effective October 1, 2025), continued deleveraging, focus on customer experience, network expansion, and digital transformation.
2 · Q&A Highlights
Q 1 (Composite): What is the impact of UK-US/EU tariffs and the India-UK FTA on JLR volumes, pricing, and operations?
A (Management):
• Range Rover models for India are already localized; no immediate price changes.
• Tariffs increase from 2.5% to 10% (UK to US) and 2.5% to 25% (EU to US for Defender/Discovery); awaiting further details.
• JLR has launched transformation missions to protect EBIT via cost reduction, technical changes, and commercial negotiations.
Q 2 (Composite): What are the milestones and outlook for PV double-digit EBITDA margin, EV mix for CAFE norms, and market share targets?
A (Management):
• Targeting 10%+ EBITDA via cost reduction, pricing optimization, and richer model mix; exited FY25 at 8.2%.
• EV penetration already at 11%, above the 10%+ needed for CAFE 3; aiming for 30%+ by FY30.
• Aspiring to maintain 50%+ EV market share despite short-term volatility from new launches.
Q 3 (Composite): What is the CV industry outlook, especially for M&HCV, and impact of DFC and AC regulation?
A (Management):
• Expecting single-digit growth across all CV segments, with Q2 likely stronger due to base effect.
• Fleet utilization up 2–5% YoY; DFC impact limited to some container traffic, but road sector remains competitive.
• AC regulation to increase costs by 0.5–1.2% depending on segment; fuel efficiency impact to be low single digits.
Q 4 (Composite): JLR emissions costs, Range Rover Electric launch, and impact of delayed emission targets?
A (Management):
• Emissions costs expected to rise in near term; regulatory environment in flux.
• Range Rover Electric in advanced testing; reservations later this year, 62,000 on waiting list.
• ICE availability to be extended to meet consumer demand; investments in both ICE and BEV to continue.
Q 5 (Composite): JLR VME (variable marketing expense) trends, warranty costs, and regional growth outlook?
A (Management):
• VME levels rising globally but not dramatically; will monitor US market response to tariffs.
• Warranty costs are a key focus; aim to cap and reduce over time.
• Overseas, UK, and Germany expected to see growth; China remains challenging but dealer consolidation is stabilizing.
Q 6 (Composite): PV PLI incentive accruals and sustainability of run rate?
A (Management):
• Q4 PLI accrual at Rs. 170 crore, with Rs. 30–40 crore pertaining to prior quarter; run rate expected to continue and ramp up as more models get certified.
Q 7 (Composite): Capex plans and funding for FY26?
A (Management):
• JLR capex to remain at GBP 3.8 billion; PV+CV at Rs. 8,400 crores, all funded by operating cash flows.
3 · Other Key Numbers
- Q4 FY25 revenue: Rs. 1,19,000 crores
- Q4 FY25 EBITDA: Rs. 16,700 crores
- Q4 FY25 auto FCF: Rs. 19,400 crores
- FY25 net cash: Rs. 1,000 crores (vs. Rs. 43,000 crores net debt in FY23)
- JLR Q4 EBIT: 10.7%; FY25 EBIT: just over 8.5%
- JLR Q4 PBT: GBP 875 million (highest in 9 years); FY25 PBT: GBP 2.5 billion
- JLR Q4 cash flow: GBP 1.35 billion; FY25 net cash: GBP 278 million
- JLR FY25 wholesales: 401,000 units; Defender: 115,000+ units (record); Range Rover brand: 225,000 units (+12% YoY)
- CV Q4 EBITDA: 12.2%; EBIT: 9.7%; FY25 EBITDA: ~12%; EBIT: 9.1%
- CV FY25 PBT: Rs. 6,600 crores; ROCE: 37.7%
- PV Vahan market share: 13.2%; SUV portfolio outperformed, hatchbacks declined
- PV CNG+EV penetration: 36%; CNG portfolio up 60% YoY
- PV FY25 PBT: Rs. 1,100 crores (down Rs. 300 crores YoY)
- PV ICE EBITDA margin: 8.1% (down ~1% YoY)
- PV EV market share: 55%; EV volume down 13% YoY
- Dividend: Rs. 6 per share (300% of face value)
- PLI benefits: Rs. 500 crores for FY25 (Rs. 385 crores in FY25, Rs. 142 crores in Q4 FY24)
- Digital: Fleet Edge 800,000 active vehicles; E-Dukaan open to all B2B users; Fleet Verse 13,000+ vehicles sold via platform
- Electric buses: 3,600+ on road; 89 delivered in Q4; 310 million+ km covered, >95% uptime
- Capex: Tata Motors (standalone) Rs. 8,400 crores in FY25, all from operating cash flows
- JLR engineering spend capitalized: 67% in FY25
- JLR cash at year-end: GBP 4.634 billion
- Demerger effective date: October 1, 2025 (appointed date: July 1, 2025)
- Dividend to be approved at shareholders meeting
All figures as stated in the call; if not disclosed, marked as such.