Tata Motors confident of JLR margin reaching 10% guided earlier: CFO

Tata Motors British arm JLR reported a 57 percent YoY increase in sales at 6,903 million pounds. JLR's operating margin, calculated as earnings before interest and taxes (EBIT) was at 8.6 percent for the quarter under review, up 6.5 percent from the previous March quarter.

The higher profitability YoY reflects favourable volume, mix, pricing and foreign exchange revaluation offset partially by higher inflation and supplier claims, the company said in a statement.

While there are indications of potential production shortfalls in the second quarter, Balaji mentioned that the overall delivery and performance for the full year look optimistic.

Tata CV division

Apart from seasonality, the Q1 of FY24 for the commercial vehicle (CV) industry was impacted by the transition to BS 6 Phase 2 emission norms. Domestic CV volumes were 82,400 units, down 14.1 percent YoY. Exports were at 3,600 units, down 32 percent YoY because of subdued economic conditions in overseas markets as well.

However, HCV volumes grew 9 percent YoY driven by the strong infrastructure push by the government, as well as increased activity in e-commerce, construction, and replacement demand in the auto logistics and petroleum sectors.

Despite the drop in volumes, the revenues improved by 4.4 percent to Rs 17,000 crore on account of an improved mix and better market operating price. The business witnessed strong EBITDA and EBIT margins of 9.4 percent and 6.5 percent, respectively, in Q1 FY24.

Talking about the commercial vehicle (CV) business, he said the company aims for better margins in this segment. Tata Motors expects to achieve double-digit margins in the CV business for the current year, driven by the anticipated rise in demand and volume growth.

"I think (in) the strong demand environment that we see, we do expect volumes to start picking up and quantitative growth starting to come back again, which should give us the operating levels that we are also looking for.

With commodities in a moderating or benign environment as far as EVs are concerned, our focus is on quality growth where we are looking at a strong savings plan as well as realisation improvement. We do expect to see margins improve, therefore the guidance for the full year is double-digit EBITDA margin and we would want to meet it if not beat it," he added.

Shares of Tata Motors ended at Rs 419.45 up 12 percent from the previous close on the BSE.