Tata Motors targets profit boost, diversification in CV business

The next phase of growth in the commercial vehicle business of Tata Motors will focus on driving revenue growth, improving EBITDA, generating strong free cash flows, a strong return on capital employed, technology, and brand leadership, stated N Chandrasekaran, Chairman and Non-Executive Director, in the company's latest annual report.

In addition to vehicular sales, Tata Motors will also focus on vehicle parts-linked businesses like spares, digital and smart mobility solutions which will help offset the volatility associated with the vehicle sales business. "This should help drive consistent value accretive growth in the coming years" noted Chandrasekaran.

During FY24, the commercial vehicle operations of the company generated annual revenue of Rs 78,791 crore in FY24, up 11.3%, and PBT (bei) of Rs  6,102 crore, growing by around 90% over the previous year.

Besides the traditional categories of heavy trucks, intermediate trucks, small commercial vehicles, buses and the international business, Tata Motors’s CV division is also focusing on growing its non-vehicular business (spares, service etc.), incubating Smart Mobility (EV mobility solutions for cities) and Digital business (digital solutions for the truck and
trip ecosystem).

"The growth in this industry is linked to the GDP growth of the country and as such there is a multi-decade growth opportunity". The (CV) business model is sound with healthy margins and good operating leverage," he continued.