Tata Motors returns to profitability with a net profit of Rs 2,958 cr in Q3FY23

After seven quarters of losses, Mumbai-based Tata Motors declared a consolidated net profit of Rs 2,958 crore for the quarter ended December on Wednesday, compared to a loss of Rs 1,516 crore the previous year, owing to strong demand amid global uncertainties. Revenue from operations climbed 22.5% YoY to Rs 88,489 crore.

EBITDA rose 52.9 percent to Rs 10,820.2 crore in the third quarter of this fiscal year from Rs 7,078 crore in the previous fiscal. In the reporting quarter, EBITDA margin was 10%, up from 9.4% in the previous fiscal. In financial terms, EBITDA is defined as earnings before interest, tax, depreciation, and amortisation. 

“In Q3 FY23, the CV industry witnessed a steady, overall demand", Girish Wagh, Executive Director, Tata Motors.

Tata CV revenues were Rs 16.9 lakh crore, up 22.5 percent from Q3 FY22. EBITDA margins were 8.4% (+580 bps YoY) and EBIT margins were 5.9% (+650 bps y-o-y) due to better mix, higher realisations, cost reductions, and lower commodity costs. Girish Wagh, Executive Director, Tata Motors said: “In Q3 FY23, the CV industry witnessed a steady, overall demand. Our focus on creating ‘’Demand Pull’ from customers and sustained emphasis on retail in Q3 FY23 resulted in retail sales surpassing wholesale by 6.3%, thereby enabling reduction in inventory as we transition towards BS VI phase-2 norms. Led by realization improvement, revenue growth was higher than volume growth. Realization improvement coupled with commodity softening and cost control resulted in improved margins. Going forward, we will maintain our agility and keep a close watch on the evolving geopolitical, inflation and interest rate risks on both supply and demand".

“Q3 FY23 was one of the best quarters for the PV industry with strong retails from new launches, robust festive demand, and adequate supply of vehicles", Shailesh Chandra, Managing Director Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.

At Rs 11.7 lakh crore, Tata PV revenues rose 37% from the previous fiscal year. EBITDA margins were 6.9 percent (+370 bps YoY) and EBIT margins were 1.5 percent (+510 bps) due to increased volumes and mix, higher realisations, softening commodities, and certain one-offs. PBT (bei) was Rs 0.3 lakh crore, compared to a loss of Rs 0.3 lakh crore in Q3 FY22. Shailesh Chandra, Managing Director Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility said, “Q3 FY23 was one of the best quarters for the PV industry with strong retails from new launches, robust festive demand, and adequate supply of vehicles. Tata Motors posted its highest ever quarterly retails in Q3 FY23 and crossed the 50,000 units of monthly retail for the first time".

“JLR has returned to profit as chip shortages eased in the quarter and production and wholesales increased", Adrian Mardell, Jaguar Land Rover’s Interim Chief Executive Officer.

JLR revenues were £6.0 billion, up 28% from Q3 FY22 and 15% sequentially due to improved supplies, model mix, and pricing. Profit before tax was £265 million, up from £9 million a year earlier, and EBIT margin was 3.7%, up from 1.4% in Q3 FY22. Increased wholesale volumes, favourable mix, price, and foreign exchange offset higher inflation and supplier claims mostly attributable to constricted quantities to boost profitability. Q3 FY22 free cash flow was £490 million. Adrian Mardell, Jaguar Land Rover’s Interim Chief Executive Officer, said: “JLR has returned to profit as chip shortages eased in the quarter and production and wholesales increased. These improved results are testament to the hard work and dedication of our people across the business who have delivered a further increase in production of our New Range Rover and Range Rover Sport models."

Tata Motors said it remains cautiously optimistic on demand despite global uncertainties, will remain vigilant on demand and focus on profitable growth, and improving semiconductor supplies and stable commodity prices will aid revenue growth, margin improvement, and positive cash delivery in Q4 FY23.