Flat earnings highlight debt-funded growth and margin pressure.
01 Sep 2025 | 16161 Views | By Ashutosh Radhey Shyam & Ketan Thakkar
Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) – the Indian arm of Europe’s largest carmaker – posted flat revenues and profits in FY2024-25, with topline at ₹19,053 crore (FY24: ₹18,960 crore) and net profit at ₹94 crore (FY24: ₹96 crore).
The year was marked by what the company described ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) – the Indian arm of Europe’s largest carmaker – posted flat revenues and profits in FY2024-25, with topline at ₹19,053 crore (FY24: ₹18,960 crore) and net profit at ₹94 crore (FY24: ₹96 crore).
The year was marked by what the company described as “consolidation and stability,” as modest growth in turnover was offset by lower operating profit.
As per the financials sourced from Tofler – the total income stood at ₹20,140 crore, compared with ₹20,076 crore in FY24. Operating profit (EBIT) slipped to ₹323 crore (FY24: ₹345 crore). Profit after tax remained flat at ₹94 crore, while other comprehensive income halved to ₹69 crore (FY24: ₹133 crore). Overall profit, including other income items, dropped to ₹163 crore from ₹229 crore in the previous year. The Board has not declared a dividend for FY25, conserving resources for future programmes.
Five-Year Trends: Revenues doubling, but Profits lag
While revenues have doubled in the past five years (₹9,300 crore in FY20 to over ₹19,000 crore in FY25), profitability has sharply deteriorated.
• Margins under pressure: Operating margin, which briefly turned positive at 2.5% in FY23, fell back to 1.7% in FY25. Net margin slid from 8.7% in FY21 to below 0.5% in FY24–25.
• Returns have collapsed: ROE, which peaked at 16.3% in FY21, fell to 1.9% in FY24, with FY25 showing little recovery.
• Debt-funded growth: Borrowings more than doubled from ₹1,139 crore in FY20 to nearly ₹2,900 crore in FY24, pushing debt-to-equity to 0.6x.
• Liquidity tightening: The current ratio has stayed below 1 since FY22, while working capital days slipped deeper into negative territory, indicating reliance on vendor financing.
The numbers suggest that while SAVWIPL has gained scale in India, it has not yet translated this into sustainable profitability. FY25, with flat profits and muted operating leverage, extends this pattern.
Consolidation and Transformation
The Directors’ Report termed FY25 as a year of “consolidation and stability.” SAVWIPL introduced 30 new products and upgrades across five brands, including its first sub-4m SUV, the Skoda Kylaq.
Brand-Wise Performance
• Volkswagen: Contributed 84,000 units, including exports, aided by Taigun and Virtus GT variants and the Tiguan R-Line. The pre-owned business grew by 10%, supported by a 215+ outlet and 148 service centre networks.
• Skoda Auto India: Sold 44,869 units, boosted by the Kylaq unveil and updates to Slavia and Kushaq. Expanded to 280 touchpoints across 164 cities; Kylaq secured a 5-star Bharat NCAP rating.
• Audi: Retailed 5,993 units, down year-on-year, though Audi Approved:plus pre-owned volumes grew 31%.
• Porsche: Delivered 1,006 units, its first four-figure tally, up 10% YoY.
• Lamborghini: Reported record sales of 113 units, its best-ever in India.
In all, SAVWIPL handled close to 136,000 vehicles across its brands in FY25, though Volkswagen’s tally includes export volumes.
Aftersales & Network Expansion
The group expanded its service reach by 35% to 540 touchpoints nationwide, with management emphasising customer experience and service quality alongside product launches.
On sustainability, the company became the first in India to secure EPR Oil certification for waste oil management and planted over 700,000 trees. It expanded its 18.5 MWp rooftop solar plant, pushing renewable electricity usage to over 30%.
Outlook
The company flagged risks from geopolitical tensions, muted global growth, supply chain disruptions, and reciprocal tariff threats, but reiterated confidence in its India operations. With a “strong foundation, clear direction and a talented team,” SAVWIPL said it is prepared to convert challenges into opportunities.