Tata Motors reported a 22% year-on-year decline in its Q3 FY25 profit, which fell to Rs 5,451 crore, compared to Rs 7,025 crore during the same period last year. This significant drop was mainly driven by weaker performances in its Jaguar Land Rover (JLR) division and the domestic car segment. While the company faced challenges, its SUV sales experienced growth, helping to offset some of the losses.
Key Factors Behind the Profit Decline
The sharp profit dip in Q3 was largely due to a 12% drop in JLR’s pre-tax profit and a 38% decline in earnings from Tata Motors’ domestic car business. The company’s EBIT margin hit 9%, the highest in a decade, though its EBITDA margin decreased by 200 basis points to 14.2%. Despite these setbacks, Tata Motors’ total revenue rose by 3% to Rs 1.13 lakh crore, signaling some resilience amid the difficulties.
Analyst Expectations Fall Short
Several analysts had expected Tata Motors to offer substantial discounts in an attempt to boost demand, which in turn could negatively impact its earnings. Unfortunately, these projections seemed to have played out as anticipated, contributing to the disappointing profit figures.
Tata Motors Faces Challenges, But SUV Sales Show Promise
Despite the decline in overall profits, Tata Motors’ SUV segment saw a positive uptick, offering some hope for future growth. However, the company’s struggles in its key segments, especially in its premium JLR division, underscore the challenges it faces in a competitive and volatile market.
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