Tata Motors Shares Slip Over 9% After Weak Q3 Performance; Analysts Cut Targets
Passenger vehicle (PV) revenues also fell by 4.3 per cent, but EBITDA margins improved by 120 basis points to 7.8 per cent, driven by cost controls and the PLI incentive
Tata Motors share price dropped by as much as 9.06 per cent on Thursday, hitting a fresh 52-week low of Rs 684.25, following disappointing third quarter results for the financial year 2024-25 (Q3FY25).
The company reported a 22.4 per cent year-on-year decline in consolidated profit, which fell to Rs 5,451 crore, compared to Rs 7,025 crore in Q3FY24. Revenue saw a modest 2.7 per cent year-on-year increase, reaching Rs 1,13,575 crore, up from Rs 1,10,577 crore a year ago.
Commercial vehicle (CV) revenues were impacted by lower volumes and product mix, though EBITDA margins improved to 12.4 per cent, up 130 basis points, driven primarily by material cost savings and the impact of the PLI incentive.
Passenger vehicle (PV) revenues also fell by 4.3 per cent, but EBITDA margins improved by 120 basis points to 7.8 per cent, driven by cost controls and the PLI incentive.
On a positive note, Jaguar Land Rover (JLR) delivered strong results, posting record quarterly revenue, the highest EBIT margin in a decade, and marking its ninth consecutive profitable quarter.
Looking ahead, Tata Motors anticipates a gradual improvement in domestic demand, fueled by infrastructure spending, a series of new product launches, and stable interest rates. While JLR wholesales are expected to increase in Q4FY25, the company remains cautious about overall demand, particularly in China.
Nuvama highlighted a 15 per cent year-on-year decline in Q3FY25 EBITDA, which missed estimates due to weaker-than-expected performance in JLR and the Indian CV division. As a result, the management has revised its FY25E JLR revenue forecast downward by 3 per cent, prompting Nuvama to reduce its FY25E EBITDA estimate by 4 per cent, according to a Business Standard Report.
Analysts now forecast a 2 per cent revenue and EBITDA compound annual growth rate (CAGR) from FY25–27E. JLR volumes are expected to decline (-4 per cent CAGR) due to the exhaustion of the order book, the discontinuation of Jaguar models, and weak demand across regions, states the report.
At 11 am, Tata Motors’ share was trading at Rs 701.55, down 6.77 per cent on NSE.
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