Tata Motors Reports Steep Decline in Q4 Profit, Stock Declines Over 2%

Tata Motors stock declined up to 3% in early morning trade Wednesday, after a below-expectation fourth-quarter earnings report published after the market closed on Tuesday.

Shares dropped 2.8% to ₹687.9 by mid-morning, and as of 12:15 PM, the shares are trading at ₹696.25, with a decline of 1.67%.

Q4 Profit Halves, Revenue Stagnant

Tata Motors reported a consolidated net profit of ₹8,470 crore, lower 51% year-on-year, even as revenue grew marginally by 0.4% to ₹1,19,503 crore.

Operating performance too declined, with EBITDA falling 4.1% to ₹16,700 crore and margins dipping to 14%, led primarily by weakness in the Jaguar Land Rover (JLR) business.

FY25 Revenue Hits Record, But Profit Contracts

For the year, Tata Motors registered record consolidated revenue of ₹4,39,695 crore, a modest 1.3% rise compared to the previous year. Yet, net profit declined 11.4% to ₹ 27,830 crore, as cost pressures and segmental headwinds put a dampener on overall profitability.

Importantly, the company attained debt-free status for its automotive business, an important milestone.

JLR Margins Hold Despite Global Headwinds

The luxury segment JLR recorded a 1.1% volume growth and a 2.4% revenue growth, driven by strong SUV sales in Europe and North America.

Profit before tax rose to £875 million, with EBIT margins rising to 10.7%, driven by product mix and declining depreciation.

In spite of this, analysts raised concerns about emerging risks such as trade barriers, competitive pressures in China, and future model volume uncertainty. The absence of official direction for FY26 further fueled caution among investors.

Domestic Business Experiences Pressure in PV, Flat CV Outlook

Commercial vehicle (CV) volumes in India declined 5% for the quarter, with segment revenues falling by just a slim margin. The export performance was better, but the near-term is weak with competition from rail and a high base.

Passenger vehicle (PV) performance was softer. Volumes dropped 5%, revenue decreased 13%, and margins fell to 1.6%, hurt by muted demand and lower realisations. All the same, the company is still gaining from its EV and CNG portfolio, which now constitutes 36% of total PV sales.

Investor Sentiment Divided on Road Ahead

While there are some market participants who feel Tata Motors' profitability can stabilise with cost control and a better product mix, others are cautious about risks in both global and domestic markets. These are JLR's vulnerability to tariffs and weakening growth, dull prospects for Indian CVs, and PV margin pressure.

Earnings and margin growth forecasts have been tempered, and price targets lowered to capture cautious optimism or mild pessimism. In spite of near-term concerns, Tata Motors' improving balance sheet and fortifying EV strategy still provide grounds for a longer-term positive view.

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