INDIA’S Tata Motors reported a surprise drop in second-quarter profit and its first revenue decline in 10 quarters on Friday (Nov 8), hurt by weakness in both its luxury vehicles unit Jaguar Land Rover and domestic businesses.
The company posted a profit of 33.43 billion rupees (S$523.5 million) for the quarter ended Sep 30, down 11 per cent on-year.
Analysts, on average, had expected a profit of 43.96 billion rupees, per data compiled by LSEG.
Tata Motors is India’s third-largest carmaker by volume, but relies on British luxury carmaking unit JLR for two-thirds of its revenue.
Its overall revenue dropped 3.7 per cent to 1.01 trillion rupees, in-line with analysts’ expectations of one trillion rupees.
Revenue at JLR fell 1 per cent, with wholesales dropping 10 per cent. That dragged the unit’s earnings margin before interest and taxes to 5.1 per cent from 7.3 per cent a year ago.
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JLR said its performance was weighed down by aluminium supply constraints following flooding at one of its suppliers, as well as higher promotional expenses to boost demand.
However, it expects dispatches to dealers to recover in the second half of the current fiscal year 2025 as aluminium supply normalises.
Still, the ‘Range Rover’ SUV manufacturer maintained its full-year Ebit margin expectation of 8.5 per cent and full-year revenue estimate of £30 billion pounds (S$51.4 billion).
JLR reported revenues of 13.86 billion pounds in the first half of fiscal year 2025.
Tata Motors’ domestic carmaking business reported a 4 per cent revenue drop, hurt by weak demand, while the commercial vehicles business reported a 14 per cent revenue decline. REUTERS
