Tata Motors sees a relatively weak H1, set to shed net automotive debt though in FY25

Having reported record high revenue, profits and free cash flows, Tata Motors now expects to become net automotive debt free on a consolidated basis in FY25, it said in a stock exchange filing.

The company is ‘cautiously optimistic’ on domestic demand over the full year, but expects the first half of the financial year to be relatively weaker.

Tata Motors’ India business is debt free.

“The premium luxury segment demand is likely to remain resilient despite emerging concerns on overall demand. Despite this, we are confident of delivering a strong performance in FY25,” Tata Motors said.

Tata Motors outlook for JLR

Tata Motors expects EBIT margins in FY25 to be around FY24 level. It expects a modest increase in investment expenditure to £3.5 billion but still expect to become net debt zero during FY25. “We have delivered a record financial performance for the company, generating free cashflow of £2.3 billion, enabling us to reduce net debt to £0.7 billion. The foundation of this performance was the sustained global demand for our modern luxury vehicles, led by our Range Rover and Defender brands, underpinned by a consistent focus on operational improvement,” said Adrian Mardell, JLR Chief Executive Officer.

Tata Motors outlook for CV business

A promising GDP outlook, government’s incentives and a continuing focus on infrastructure is likely to help improve the demand for commercial vehicles from H2FY25. It remains ‘cautiously optimistic’ for domestic demand while keeping a close watch on geopolitical developments, interest rates, fuel prices and inflation, Tata Motors said.India’s CV industry’s volumes grew 2 per cent during FY24, impacted by a high base effect of FY23, elections held across 5 states and the announcement of general elections.

“Our sharp focus on profitable growth resulted in the CV business recording its highest-ever revenues of Rs 78,800 crore and profits of Rs 6,100 crore in FY24. Going forward, we will intensify our efforts to grow market share, profitably and consistently, in every business segment by delivering more value to customers with innovative products, smarter services and holistic mobility solutions,” said Girish Wagh, Executive Director, Tata Motor.

Tata Motors outlook for PV business

Tata Motors expects demands for passenger cars to remain strong. However, factors like high base effect in addition to elections, heatwave and others may keep the growth rate moderate, said Tata Motors.

The company aims to focus on retails and deliver ‘market-beating’ growth to sustain its double-digit EBITDA margin and positive free cash flows for this business.

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