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What is the story about?
Tata Motors Limited’s commercial vehicles business on Thursday, January 29, reported a mixed performance for the December quarter, with profitability impacted by one-off items even as operating metrics remained strong.
The CV arm posted a net profit of ₹705 crore in Q3, down 48% year-on-year from ₹1,355 crore, largely due to exceptional charges during the quarter. Revenue from operations rose 1.8% YoY to ₹21,847 crore, compared with ₹18,819 crore a year ago.
Operating performance remained robust, with EBITDA rising 41.8% YoY to ₹2,883 crore from ₹2,033 crore in the year-ago period. As a result, EBITDA margin expanded sharply to 13.2% from 10.8%, reflecting improved realisations and operating leverage.
Read more: Tata Motors CV shares still have more upside in store; UBS says 'buy'
Profitability was weighed down by exceptional items totalling around ₹1,600 crore, which included the impact of the new labour codes (₹603 crore), demerger-related costs (₹962 crore), and acquisition-linked expenses (₹82 crore), the company said in its exchange filing.
Girish Wagh, MD & CEO, Tata Motors Ltd attributed the strong performance to “Disciplined execution of an agile strategy," along with rise in demand supported by GST 2.0 and the festive season.
He added, "Our recent launch of 17 next-generation trucks under the ‘Better Always’ philosophy sets new benchmarks in safety, total cost of ownership, and smarter, emission-free mobility, reinforcing our commitment to innovation and industry leadership. With infrastructure spending accelerating, we are well positioned to sustain momentum and drive continued growth”
On an underlying basis, the CV business continued to show strength. Consolidated profit before tax (before exceptional items) stood at ₹2,568 crore for the quarter, supported by healthy demand and disciplined cost management. The segment also generated strong cash flows, with free cash flow of about ₹4,800 crore during the quarter, aided by efficient working capital management.
Operationally, CV wholesales rose 20% YoY to 116,800 units, with domestic volumes up 18% and exports jumping 70%. The company’s domestic CV market share improved sequentially to 35.5% in Q3.
Commenting on the performance, GV Ramanan, CFO, Tata Motors Ltd, said, "The quarter marked significant milestones, including our 10th consecutive quarter of double-digit EBITDA margins and achievement of double-digit EBIT margins."
"With this trajectory, we remain confident of delivering on our stated financial guidance,” he added.
Shares of the company closed 0.44 % higher at ₹470 ahead of the results announcement on Thursday. The stock has surged 9.74% in the last one year.
The CV arm posted a net profit of ₹705 crore in Q3, down 48% year-on-year from ₹1,355 crore, largely due to exceptional charges during the quarter. Revenue from operations rose 1.8% YoY to ₹21,847 crore, compared with ₹18,819 crore a year ago.
Operating performance remained robust, with EBITDA rising 41.8% YoY to ₹2,883 crore from ₹2,033 crore in the year-ago period. As a result, EBITDA margin expanded sharply to 13.2% from 10.8%, reflecting improved realisations and operating leverage.
Read more: Tata Motors CV shares still have more upside in store; UBS says 'buy'
Profitability was weighed down by exceptional items totalling around ₹1,600 crore, which included the impact of the new labour codes (₹603 crore), demerger-related costs (₹962 crore), and acquisition-linked expenses (₹82 crore), the company said in its exchange filing.
Girish Wagh, MD & CEO, Tata Motors Ltd attributed the strong performance to “Disciplined execution of an agile strategy," along with rise in demand supported by GST 2.0 and the festive season.
He added, "Our recent launch of 17 next-generation trucks under the ‘Better Always’ philosophy sets new benchmarks in safety, total cost of ownership, and smarter, emission-free mobility, reinforcing our commitment to innovation and industry leadership. With infrastructure spending accelerating, we are well positioned to sustain momentum and drive continued growth”
On an underlying basis, the CV business continued to show strength. Consolidated profit before tax (before exceptional items) stood at ₹2,568 crore for the quarter, supported by healthy demand and disciplined cost management. The segment also generated strong cash flows, with free cash flow of about ₹4,800 crore during the quarter, aided by efficient working capital management.
Operationally, CV wholesales rose 20% YoY to 116,800 units, with domestic volumes up 18% and exports jumping 70%. The company’s domestic CV market share improved sequentially to 35.5% in Q3.
Commenting on the performance, GV Ramanan, CFO, Tata Motors Ltd, said, "The quarter marked significant milestones, including our 10th consecutive quarter of double-digit EBITDA margins and achievement of double-digit EBIT margins."
"With this trajectory, we remain confident of delivering on our stated financial guidance,” he added.
Shares of the company closed 0.44 % higher at ₹470 ahead of the results announcement on Thursday. The stock has surged 9.74% in the last one year.
