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  • 25 Jul 2023
  • ICICIdirect

TATA MOTORS Q1 RESULTS 2024: TOPLINE UP 42%

TATAMOTORS - 699 Change: -8.75 (-1.24 %)

 

Tata Motors reported its Q1FY24 numbers today. The share price has touched an all-time high of Rs 642.50 per share, with a 2% gain in the share price. Let us look at how the auto major performed in the June quarter.

About Tata Motors

Tata Motors is an Indian multinational automotive manufacturing company. It is known for producing a wide range of vehicles, including passenger cars, commercial vehicles, and electric vehicles. The company has a significant presence in the domestic and international markets.

Crucial parameters

  • PE: 76.61
  • 52-week high: Rs 642.50
  • Market Cap: Rs 2,12,416.45 crore
  • ROE: 12.14

 

Share price movement

In the last one month, Tata Motors' share price has jumped by nearly 13%. In 2023, the share price has given astronomical returns of Rs 62.56%. For the 5-year time frame, the share price has given stellar returns of 140% to its investors.  

How was Tata Motors performed in Q1FY24?

Let us look at crucial numbers of Tata Motors for Q1FY24:

Revenue: Tata Motors has reported a revenue of Rs 102,236 crore for Q1FY24, a growth of 42.1% compared to the year-ago period. The maximum revenue growth came from Jaguar Land Rover (57% jump), while Tata Commercial Vehicles reported lower single-digit revenue growth. The revenue is higher than our estimate of Rs 98,080.6 crore. 

EBITDA: The consolidated EBITDA reported by the company was Rs 14,700 crore, up 177% YoY. The EBIT reported was Rs 8,300 crore, all showing a sharp improvement driven by JLR and CV businesses, whilst the PV business was steady. The EBITDA% was 14.4%, up 700 bases compared to the year-ago period. 

Net Profit: We had estimated Tata Motors to report Q1 net profit of Rs 3,151.4 crore. The company has reported a consolidated net profit of Rs 3,202 crore, beating the estimates marginally. In the year-ago period, the company has reported a net loss.

 

Performance of Different Segments

 

Jaguar Land Rover

For Q1FY24, the segment reported a revenue of £6.9 million, a growth of 57% YoY. EBIT margin in the quarter was 8.6%, up from 6.5% in Q4FY23. The higher profitability year-on-year reflects favorable volume, mix, pricing, and foreign exchange revaluation offset partially by higher inflation and supplier claims. Free Cash Flow (FCF) was at £451 million, the highest JLR Q1 cash flow on record. The cumulative FCF over the last three quarters is £1.8 billion. Cash on hand increased to £4 billion and net debt was reduced to £2.5 billion on June 30, 2023. 

Projections: Q2 production and cashflow are expected to be lower than Q1, reflecting the annual summer plant shutdown, while wholesales and profitability are expected to be more in line with recent quarters.

Tata Commercial Vehicles

The segment reported a revenue of Rs 16,991 crore, EBITDA margins of 9.4%, which is up by 390 basis points. Q1 CV domestic wholesales at 82.4K units (down 14.1% yoy), domestic retails at 77.6K units (down 14.3% YoY).  

Projections: The company expects demand to sequentially improve in FY24. They also aim to step up Vahan's market shares and revenue growth through innovation, service quality, and thematic brand activation and deliver double-digit EBITDA in FY24 by improving realizations and cost savings.  

Passenger Vehicles

For Q1FY24, the segment reported a revenue of Rs 12,839 crore, a growth of 11.1% compared to the year-ago period. The EBITDA margins have declined by 80 bps and stood at 5.3%, impacted by a higher mix of EVs and higher fixed expenses. The EV profitability is likely to improve from H2 onwards. EBIT margins improved by 10 bps YoY to 1.0%.

Projections: Going forward, the company expects the demand to remain steady with the onset of the festive season, while the electrification trend is set to strengthen further.

To sum up

The company has reported profits again, and the leadership announcements on the outlook for the remaining FY24 are positive, especially for the JLR business. The company is focused to enter an electric future and transform into a digitally savvy modern luxury business. They aim to deliver a strong performance in the rest of the year too, thanks to a healthy order book coupled with low-break-even in JLR.