Tata Motors Q4 FY25 Results: Profit Plunges 51% Amid Tariff War Challenges

Tata Motors Q4 FY25 Results: Tata Motors Ltd., a leading player in the commercial and passenger vehicle sectors and the parent company of luxury carmaker Jaguar Land Rover (JLR), announced its Q4 FY25 results on May 13, 2025. The company faced a challenging quarter, with a significant 51% year-on-year (YoY) decline in consolidated profit after tax (PAT). Despite flat revenue growth and a proposed dividend, the results reflect a tough operating environment driven by geopolitical tariffs and declining volumes. This article dives into the key financial highlights, segment performance, and what lies ahead for Tata Motors.

Tata Motors Q4 FY25 Results Financial Highlights

Tata Motors reported a consolidated PAT of ₹8,470 crore in Q4 FY25, down 51% from ₹17,407 crore in Q4 FY24. However, on a quarter-on-quarter (QoQ) basis, PAT surged from ₹5,406 crore in Q3 FY25, indicating sequential improvement. Revenue from operations remained nearly flat YoY at ₹119,502 crore, a marginal 0.4% increase from ₹119,986.3 crore in the same quarter last year, but rose 6% QoQ from ₹112,608 crore.

The company’s EBITDA margin contracted by 60 basis points (bps) YoY to 14%, while EBITDA for the quarter fell 6% YoY to ₹16,002 crore. For the full FY25, Tata Motors achieved record revenues of ₹439,700 crore, with an EBITDA of ₹57,600 crore and a profit before tax (PBT) of ₹34,300 crore, up ₹5,000 crore from FY24. The group also turned net auto cash positive, ending FY25 with a net cash balance of ₹1,000 crore.

Segment Performance

Jaguar Land Rover (JLR)

JLR, a critical contributor to Tata Motors’ revenue, faced headwinds in Q4 FY25. According to Kotak Institutional Equities, JLR volumes (excluding China JV) declined 3% YoY due to weak demand in the EU and China markets. Revenue for JLR is estimated to have dropped 2% YoY, despite a 1% YoY increase in average selling price (ASP) driven by a richer model mix, including higher sales of Range Rover, Range Rover Sport, and Defender. However, increased discounting and a lower China market mix offset these gains.

JLR’s EBITDA margin is projected to decline by 60 bps YoY to 15.6%, impacted by negative operating leverage, higher variable marketing expenses (VME), and increased warranty costs. Despite this, JLR’s EBIT margin is expected to improve to 10.7%, up 150 bps YoY, supported by better operating leverage and lower depreciation due to delayed electric vehicle (EV) plans.

Commercial Vehicles (CV)

The commercial vehicle segment showed resilience, with volumes growing 10% QoQ. HSIE Research estimates a CV EBITDA margin of 12.4%, driven by improved operating leverage and a 3% QoQ increase in realizations due to price hikes and a lower mix of small commercial vehicle (SCV) sales. Motilal Oswal Financial Services (MOFSL) projects a 90 bps YoY expansion in CV EBITDA margin, reflecting stronger operational efficiency despite a 3% YoY volume decline.

Passenger Vehicles (PV)

Tata Motors’ passenger vehicle segment struggled, with a 6% YoY decline in volumes and a loss of market share in Q4 FY25, as competitors like Mahindra, Kia, and Skoda outperformed. The PV EBITDA margin is expected to remain stable YoY at 7.3%, with a marginal QoQ improvement to 7.9%, supported by better operating leverage and a lower EV mix. However, rising discounts towards the end of March impacted overall profitability.

Dividend Announcement

In a positive move for shareholders, Tata Motors’ board recommended a final dividend of ₹6 per share for FY25, subject to shareholder approval at the 80th Annual General Meeting. This decision underscores the company’s commitment to rewarding investors despite a challenging financial year.

Share Price Movement

Ahead of the Q4 results, Tata Motors’ share price closed nearly 2% lower on May 13, 2025, at ₹708 on the BSE and ₹708.30 on the NSE. The stock experienced intraday volatility, reaching a high of ₹726.65 and a low of ₹714.35. Over the past year, Tata Motors’ shares have declined 26%, underperforming the broader market. However, the stock has delivered an impressive 720% return over the past five years, reflecting its long-term growth potential.

Industry Challenges and Geopolitical Impact

Tata Motors highlighted that tariffs and geopolitical actions are creating an “uncertain and challenging” operating environment. The global premium luxury segment and the Indian domestic market are expected to remain relatively resilient, but the company is navigating increased costs and market volatility. Despite these challenges, Tata Motors emphasized its focus on executing its growth strategy, optimizing costs, and maintaining strong cash flows while continuing to invest in future technologies.

Future Outlook

Analysts remain cautiously optimistic about Tata Motors’ long-term prospects. YES Securities expects a 5.2% QoQ revenue increase and a 70 bps QoQ improvement in EBITDA margins, driven by JLR’s sequential profitability gains. The company’s focus on cost control, operational efficiency, and innovation in both EV and traditional vehicle segments will be critical to navigating the tariff war and competitive pressures.

Key areas to watch include JLR’s demand outlook, margin recovery, and Tata Motors’ ability to regain market share in the PV segment. The company’s transition to net auto cash positive in FY25 signals financial discipline, which could support further investments in electrification and sustainable mobility.

Conclusion

Tata Motors’ Q4 FY25 results reflect the broader challenges facing the automotive industry, including geopolitical uncertainties and volume declines. While the 51% YoY PAT drop is a setback, the company’s QoQ improvement, dividend announcement, and strong FY25 performance highlight its resilience. As Tata Motors continues to strengthen its fundamentals and adapt to a dynamic market, investors will closely monitor its strategies to drive growth and profitability in the coming quarters.

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