Tata Motors crosses USD 50 billion mark in annual turnover

In a landmark achievement for the Indian automotive industry, Tata Motors became the first domestic automaker to breach the USD 50 billion mark in annual turnover. With a 27 percent year-on-year growth, the company clocked Rs 4.38 lakh crore (around USD 52) in revenue from operations during 2023-24.

This comes a few months after Tata Motors surpassed Maruti Suzuki India on the stock market to become the most-valued automaker in India with the combined market capitalisation of Tata Motors and Tata Motors DVR shares outpacing that of India’s largest carmaker Maruti Suzuki.

The automaker revved past the turnover milestone as it managed to sell around 1.4 million vehicles with the ramping up of production at JLR and India passenger vehicle business. Also, a richer product mix and pricing actions in the commercial vehicle segment aid revenue growth.

British luxury brand JLR is the main revenue contributor of Tata Motors, accounting for around 70 percent of its consolidated revenue from operations. The remaining revenue comes primarily from the commercial vehicle business – around 18 percent – and the India passenger vehicle business - 12 percent.

Revenue from JLR business rose around 27 percent during the financial year with a 25 percent growth in volumes and Tata Passenger Vehicles revenue grew 9 percent as volume was higher by 6 percent. The commercial vehicles unit’s revenue increased 11 percent despite a 4 percent decline in volumes as better mix and pricing actions drove the average selling price higher.

For 2023-24, the automaker's consolidated net profit came in at around USD 3.8 billion (Rs 31,399.09 crore) with double-digit operating profit margins in JLR and commercial vehicle business.

India business debt free; Eyes net cash for JLR this year

Tata Motors also achieved another major milestone during the financial year 2024 with its India domestic automotive business turning net cash. The Indian business is now debt-free and turned net cash with Rs 1,000 crore.

During the financial year, the automaker pared down its net auto debt by around Rs 27,700 core. Total debt stood at Rs 16,000 crore at the end of March, with JLR’s net debt at Rs 7,700 crore and TML Holdings’ debt at Rs 9,900 crore. This compares with a total debt of Rs 43,700 crore at the end of FY23.

The management noted that auto-free cash flow of almost Rs 14,000 crores for the fourth quarter and Rs 27,000 crores for the full year helped the company reduce its automotive debt.

“JLR and Singapore are two places where we have the debt to be knocked out. And the plan is to ensure this year we take that out completely. Obviously, at a gross level, and then the individual line items will be there. So, Singapore may take slightly longer to take out. But between TML and JLR overall, we should be moving into net cash,” Group CFO PB Balaji said in an investor call.

Meanwhile, the company has lined up over USD 5.1 billion (Rs 43,000 crore) for investment in the current financial year to sustain its growth momentum. The investment will go for product and technology development in its British luxury car brand Jaguar Land Rover as well as in its passenger and commercial vehicle units.

“We expect investment spend to be around GBP 3.5 billion, and we are holding our target to be net debt zero by the end of this financial year,” JLR CFO Molyneux said.