Tata Motors's profit falls 30.5% on lower sales
What's the story
Tata Motors has reported a 30.5% year-on-year (YoY) decline in its consolidated net profit for the June quarter. The company's net profit stood at ₹3,924 crore, down from ₹5,643 crore in the same quarter last year. The decline was mainly due to lower sales across all business segments and reduced profitability at Jaguar Land Rover (JLR), which was hit by US trade tariffs.
Revenue dip
Slight decline in revenue
Along with the profit drop, Tata Motors also witnessed a slight decline in its revenue for the June quarter. The company's consolidated revenue from operations stood at ₹1,03,792 crore, which is a 2.45% decline from ₹1,06,399 crore in the same period last year. However, this figure was higher than analysts' average estimates of ₹1 lakh crore for the quarter under review.
Margin decline
Significant drop in EBITDA
Tata Motors also witnessed a significant decline in its EBITDA for the June quarter. The company's EBITDA fell by 39.2% YoY to ₹9,724 crore, with an EBITDA margin slipping by 480 basis points to 9.2%. This is the lowest margin recorded in several quarters and indicates a tough financial period for the company amid declining sales and profitability across its business segments.
Trade impact
Decline in revenue largely due to JLR
The decline in revenue at Tata Motors was largely attributed to JLR, which accounts for about two-thirds of the company's overall revenue. The revenue from JLR fell by 9.2% to £6.6 billion during the quarter under review. This was primarily due to the imposition of 27.5% US trade tariffs on cars produced in the UK and EU and exported to the US, impacting overall sales performance for Tata Motors's global operations.
Guidance retention
EBIT margin guidance maintained at 5% to 7%
Despite the challenges posed by US trade tariffs, Tata Motors has maintained its EBIT margin guidance at 5% to 7% for FY26. The company said that the impact of US tariffs on JLR's business was around £250 million during the quarter. PB Balaji, Group CFO at Tata Motors, expressed optimism about future performance as tariff clarity emerges and festive demand picks up in India.