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    Tata Motors

    TATAMOTORSNeutral
    Automobile and Auto Components·13 May 2025
    Management Summary

    Tata Motors closed FY25 with record financial performance across all metrics. The group achieved net cash status, eliminating Rs 60,000 Cr peak debt. JLR delivered on both EBIT and net cash guidance despite challenging China market and tariff uncertainty. India CV maintained double-digit EBITDA margins with highest-ever PBT. PV business faced market share pressure from aging hatches but SUV portfolio outperformed. The demerger is on track for October 2025. Key focus for FY26 is navigating tariff impacts, launching Range Rover Electric, Sierra, Harrier EV, and recovering hatch market share.

    Highlights

    10

    • Highest ever revenues, highest ever PBT before exceptional items for FY25

    • Group turned net cash at Rs 1,000 Cr from peak debt of Rs 60,000 Cr

    • JLR achieved net cash positive (GBP 278M), Q4 PBT highest in 9 years at GBP 875M

    • JLR EBIT at 10.7% in Q4, 8.5% full year - aligned with guidance

    • India CV delivered highest ever PBT of Rs 6,600 Cr, ROCE 37.7%

    • PV EV business ended FY25 with both EBITDA and PBT positive

    • Final dividend of Rs 6/share (300% of face value)

    • Demerger on track - appointed date July 1, effective date Oct 1, 2025

    • PLI benefits of ~Rs 500 Cr secured for the year

    • UK-US tariff deal reduces JLR tariff from 25% to 10% for UK exports

    Concerns

    2

    • US/EU tariffs on JLR exports

    • China market remains challenging

    Key financials

    Metrics

    28

    Periods

    3

    Headline

    8
    • Group FCF (2-year cumulative)
      ₹50,000 Cr
    • Group Net Debt
      ₹-1,000 Cr
    • Group ROCE
      17.6%
    • JLR Net Cash
      278 Mn
    • JLR Cash
      4,634 Mn

    Q4

    7
    • Group Revenue
      ₹1.19L Cr
    • Group EBITDA
      ₹16,700 Cr
    • Group Auto FCF
      ₹19,400 Cr
    • JLR EBIT Margin
      10.7%
    • JLR PBT
      875 Mn
      YoY+32%

    FY25

    13
    • Group PBT (highest ever)
      ₹34,000 Cr
    • Group Revenue (highest ever)
      —
    • Group Investment
      ₹48,000 Cr
    • JLR EBIT Margin
      8.5%
    • JLR PBT
      2,500 Mn

    Guidance & targets

    7
    CategoryTargetPriority
    JLR
    FY26 Earnings Guidance
    To be provided at Investor Day June 16
    		Low
    JLR
    5-Year Investment Programme
    GBP 18 billion funded by operating cash flows
    		High
    India CV
    Industry Growth FY26
    Single digit growth
    		Medium
    India PV
    EBITDA Margin Target
    10%+
    		Medium
    India PV
    EV Market Share Target
    50%+
    		Medium
    India PV
    PLI Run Rate
    Rs 120-130 Cr per quarter, ramping with Nexon TCA in Q2 and Harrier EV in Q3
    		High
    Group
    FY26 Capex
    Similar to FY25 (~Rs 8,400 Cr India + ~GBP 3.8B JLR)
    		High

    Risks & concerns

    6
    RiskSeverity

    US/EU tariffs on JLR exports

    UK-US deal brings tariff to 10% (from 2.5%). Slovakia exports still face 25%. GBP18B investment programme unchanged but 'business as usual will not work'. — Management acknowledged

    high

    China market remains challenging

    China only 9% of mix. Legacy Jaguars ending production in China by Sept 2025. Freelander launch in 2026. — Management acknowledged

    high

    India PV market share decline from aging hatches

    Vahan market share declined to 13.2% due to Tiago and Altroz aging (5th year). SUVs outperformed but couldn't offset. — Management acknowledged

    medium

    JLR VME trend upward

    VME at 5% vs 2.6% a year ago. Industry not showing signs of becoming less competitive. — Management acknowledged

    medium

    Steel safeguarding duty and commodity headwinds

    Steel safeguarding duty already implemented. Copper and precious metals also being watched. — Management acknowledged

    medium

    Emission compliance costs rising

    Emissions costs expected to rise in first couple of years until BEV volumes and regulatory changes work through. — Management acknowledged

    medium

    Q&A highlights

    5

    “We still have a 300% increase on our tariffs from the UK to the US. So we do have to protect our bottom line delivery.”

    Tariffs went from 2.5% to 10% for UK exports, 25% for EU (Slovakia) exports. JLR launched transformation missions to offset.

    asked by Chandramouli, Goldman Sachs

    1 min read4 chapters

    Detailed Narrative

    01

    Historic Deleveraging Complete - Group Turns Net Cash

    Tata Motors achieved a landmark milestone by turning net cash at Rs 1,000 Cr, down from peak debt of Rs 60,000 Cr. JLR alone reached GBP 278M net cash with GBP 4.6B in cash reserves (deliberately high given tariff uncertainties). The FCF generation of ~Rs 50,000 Cr over two years funded Rs 48,000 Cr of investments while deleveraging. Credit ratings upgraded by 2 notches.

    02

    JLR Tariff Response and Transformation

    US tariffs represent the biggest near-term challenge. UK-US deal reduces from 25% to 10% for UK exports but Slovakia (Defender/Discovery) still faces 25% EU tariff. JLR launched 'transformation missions' with 160+ people in cross-functional squads targeting ex-works costs across GBP 16B annual spend. GBP 18B 5-year investment plan maintained. No FY26 guidance until Investor Day June 16.

    03

    India CV Steady Performance

    CV delivered double-digit EBITDA consistently with highest-ever PBT of Rs 6,600 Cr and 37.7% ROCE. FY26 outlook: single-digit industry growth expected. Key initiatives include AC regulation transition (June 8), Ace Pro launch in Q2 for SCV recovery, and continued digital transformation (Fleet Edge at 800K vehicles, 27% digital contribution to retail).

    04

    PV Business: Year of Hits and Misses, Strong FY26 Pipeline

    FY25 saw SUV outperformance (Punch #1 model) but hatch decline (Tiago, Altroz aging). CNG penetration grew 60% to 25% of portfolio. EV volume down 13% (fleet weakness) but maintained 55% share. FY26 is strongest product cycle: refreshed Tiago/Altroz, Sierra launch, Harrier EV, Sierra EV, multi-powertrain Harrier/Safari. Target: recover to 10%+ EBITDA and maintain 50%+ EV share.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.