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Tata Motors

MRF Q1 FY26: Revenue Up, Profits Down on Margin Pressures
Business, Equities, Markets - January 23, 2025

TATA Motor: Reorganization of the commercial vehicles business prior to public listing

TATA Motor: Reorganization of the commercial vehicles business prior to public listing

Tata Motors aims to list its commercial vehicles business on the stock exchanges in the upcoming financial year. Before listing, the company plans to reorganize its commercial vehicle business into eight different sub-segments.

The company wants to separate operations of commercial vehicles and passenger vehicles. It was made public by Tata Motors in the month of August, 2024.

Reason for separate entities
Its aim is to strengthen financial growth of the company and give both commercial and passenger vehicle businesses a way for independent growth. It also has goals regarding expansion of scope of operations at international level. Further, it aims at resolving the prevailing market issues and bringing value of transparency in progress of the segments.

The reorganization of the commercial vehicle business will be finished before public listing of the company on stock exchanges. This reorganization will aid the operations of commercial vehicles to get better financial strength and progress. It will be capable of handling situations of fluctuation in the truck operations.

Eight Segments in commercial vehicles
The executive director of Tata Motors, Girish Wagh stated that the Tata Motors has recognised eight segments in the commercial vehicles operation based on the customers and market sentiments. All of these segments are currently working on their own.

These 8 segments in the commercial vehicles business are buses and vans, international operations, AI services, truck business, smart mobility, small commercial vehicles, fleet edge, and non-vehicles business which consists of spares, services, and many more. In the truck operation, it includes intermediate and medium commercial vehicles and also heavy commercial vehicles. On the other hand, in small commercial vehicles comes vehicles such as pickups and mini trucks.
The company aims to focus on international business in its upcoming plan of action. It already has its presence in Africa and South Asia. It has a goal of expanding to regions such as the Middle East, ASEAN countries and North Africa. To achieve this goal, it focuses on creation of appropriate products according to needs and preference of the customers in these new areas. Apart from this, establishment of an efficient distribution and financing network for achieving the expansion goal of the company in international markets.

Challenges to the performance of Tata Motors
The company faced several challenges such as deduction in infrastructure expenditure, moderate economic growth, and uncertainty in the market due to elections resulting in fall in sales of bus and truck in the year of 2024.

Based on the Federations of Automobile Dealers Associations’ information, the company’s domestic sales declined to about 5.3 percent compared to its previous years’ sales of about 345,928 units. Also, its contribution in market share contracted to 34.43 percent compared to the previous record of 36.42 percent.

Impact of separate entities
In the last few years, Tata Motors published its financial performance separately for both Commercial vehicles and passenger vehicles operations. Dam Capital’s analyst, Mitul Shah stated that with the public listing of commercial vehicle business, an independent financial report with a separate balance sheet of the entity will lead to more information and better transparency in the functioning of the business. Further, he stated that in case the company gave progress about each segment in the commercial vehicles entity then it will aid investors to make better decisions about the valuation of the stocks and the company as well.

In present times, commercial business of the company has come across various challenges due to slowdown in the domestic commercial vehicle industry and also other challenges prevailing in the market. It steps towards creation of new models according to the needs and preference of consumers, trying new strategies and technologies will aid the company to tackle prevailing challenges and to bring robust improvement in the progress of the company in future.

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Tata Motors to operate hydrogen internal combustion engine trucks

Tata Motors to operate hydrogen internal combustion engine trucks

Overview
As the company advances a range of technologies to promote sustainable mobility, Tata Motors will continue to invest about Rs 2,000 crore a year in the creation of new commercial vehicles and capital equipment, said Executive Director Girish Wagh. The company’s commercial vehicle (CV) branch is developing a range of technologies, including hydrogen internal combustion engines, fuel cell electric vehicles, zero-emission battery electric vehicles, and alternative fuel.

Tata Motors to operate hydrogen internal combustion engine-powered trucks
Tata Motors is set to begin using hydrogen internal combustion engine-powered trucks on a test basis in the March quarter. The business and IOCL will operate the vehicles on three routes for 18 months as part of the National Green Hydrogen Mission pilot project. The corporation is developing every technology, including battery electric and even zero-emission alternatives like alternative fuel. The company is also focusing on electric fuel cells. Wagh told PTI on the sidelines of the Auto Expo, which is a part of the Bharat Mobility Global Expo 2025, that the company is also working on H2 ICE (hydrogen internal combustion engine).

The vehicle with a hydrogen internal combustion engine was unveiled by Tata Motors last week at the Bharat Mobility Global Expo 2025. According to Girish Wagh, executive director of Tata Motors, the company is preparing for both fuel-cell electric vehicles and hydrogen internal combustion engines. According to him, the vehicles equipped with internal combustion engines that run on hydrogen would begin operations this quarter. Three routes will be served: Mumbai-Pune, Mumbai-Ahmedabad, and Jamshedpur-Kalinganagar. Wagh told PTI that the pilot project will produce a lot of data that will be used to enhance both the product and the infrastructure for hydrogen fueling.

He gave a speech on Friday in the nation’s capital during the Bharat Mobility Global Expo 2025. Wagh stated that there is a lot of work being done throughout the value chain regarding the use of hydrogen as fuel and that the company already has 15 electric fuel cell buses operating with IOCL for more than ten months. Wagh added that the company is anticipating some assistance as it prepares for the commercial launch of hydrogen-fueled vehicles in 12 to 24 months.

Tata Motors’ Budget Expectations
In order to improve its value offer, Tata Motors Commercial Vehicles is redefining itself. Wagh went on to emphasize that radical change is taking place on the foundation of safety, sustainability, and artificial and digital intelligence. According to Wagh, the market for commercial vehicles has been more volatile this fiscal year. Furthermore, the business is seeing growth in every end-use sector. Consequently, we anticipate that the fourth quarter will be a successful one.

Regarding what to expect from the next Union Budget, Wagh stated that the government has been highly supportive of the transition to sustainability and electrification. According to him, there have been numerous interventions throughout the year, including FAME incentives and PLIs, in addition to the budget.

Tata Motors to continue to spend on capital equipment
The company showcased a variety of CVs at the expo that were based on different fuel technologies, including flex fuel, battery electric, ethanol, biodiesel, CNG, LNG, diesel, and H2 ICE.

When asked how much money the company would invest in developing new products, Wagh replied that it would continue to spend about Rs 2,000 crore a year on capital equipment and products, and that it would remain competitive in that area. He went on to say that up to 40% of that money is actually being spent on all of these new technologies, including connected car platforms, ADAS (advanced driver-assistance systems), and electrification. Wagh gave an explanation of why the corporation is investing in a range of technologies, stating that battery electric vehicles will be more lightweight and suitable for a specific type of route within a city or city to semi-urban area.

According to Wagh, a hydrogen-type technology is required for heavier duty and longer distances, and that’s what it looks like right now. As a result, the business is developing all of these technologies. Furthermore, he stated that Tata Motors has been working on all alternative fuels, which is where the shift would take place, because the transition (zero emission) will not come instantly. As a result, the business has made technological investments that will meet all of these needs. Tata Motors displayed 14 CVs with ADAS capabilities at the current expo. Among other things, it displayed the next-generation hydrogen-powered Prima Truck and the intra EV, an electric pickup. Further as stated by Wagh, Tata Motors has repositioned its brand for its resumes in order to better reflect India’s shifting demographics and people’s goals.

Conclusion
In addition to improving the infrastructure and vehicles, the pilot project supports Tata Motors’ repositioning for increased value in the commercial vehicle market. The company is hopeful about the industry’s future despite the fiscal year’s many obstacles, especially anticipating a robust fourth-quarter performance.

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MRF Q1 FY26: Revenue Up, Profits Down on Margin Pressures
Automobile News, Autos, Business, Equities, Markets - January 13, 2025

JLR Leads Tata Motors’ Q3FY2025 Recovery, But Domestic Challenges Persist

JLR Leads Tata Motors’ Q3FY2025 Recovery, But Domestic Challenges Persist

Jaguar Land Rover Ltd (JLR), the global subsidiary of Tata Motors Ltd, has shown signs of recovery in Q3FY2025, driven by improved wholesales and a better product mix. However, challenges in Tata Motors’ domestic business and uncertainties in the global auto market may limit the upside.

JLR: A Positive Turnaround in Q3FY2025
After a subdued performance in the first half of FY2025, JLR’s wholesales grew by 3% year-on-year (YoY) in Q3FY2025, reflecting an improvement in demand across key developed markets. While demand for premium and luxury vehicles remained tepid in retail channels, higher wholesale dispatches and an improved average selling price (ASP) indicate better revenue and profitability prospects.

Regionally, JLR’s performance was bolstered by strong demand in the US and parts of Western Europe. However, challenges persisted in the UK and China, where demand moderated. An increase in the contribution of JLR’s power brands to 70% of total sales, up from 64% six quarters ago, highlights a favorable shift towards premium models, which bodes well for margins.

Supply-side constraints that impacted JLR in earlier quarters have eased, as evidenced by reduced inventory levels and higher dispatches. Analysts anticipate a sequential improvement in JLR’s EBITDA margin for Q3FY2025, though it may still lag YoY levels. Importantly, the company remains on track to achieve £1 billion in free cash flows (FCF) for FY2025, supported by a net-cash balance sheet—a significant positive for Tata Motors’ consolidated financials.

The premium product mix in JLR’s sales continues to boost profitability prospects. As JLR’s power brands increasingly dominate the sales portfolio, the company benefits from higher margins. This trend, along with easing supply constraints, has led to improved inventory management. Analysts believe that these positive developments mark a crucial step in rebuilding investor confidence.

Domestic Business: A Mixed Bag
While JLR’s revival brings optimism, Tata Motors’ domestic operations face headwinds. The commercial vehicle (CV) segment has seen flat volume growth, reflecting a challenging demand environment. Meanwhile, Tata Motors’ passenger vehicle (PV) business has been losing market share, with electric vehicle (EV) sales failing to meet expectations amidst rising competition.

The domestic PV market is undergoing a significant transformation, with multiple new entrants and rising competition in the EV space. Tata Motors, despite its early lead in EVs, faces challenges in maintaining its growth momentum. Increased competition from both established players and startups is pressuring market share. Additionally, the company’s focus on expanding EV offerings has yet to deliver the desired results in terms of volume and profitability.

In the CV segment, economic factors such as rising interest rates and uneven demand recovery are limiting growth. Infrastructure development and government spending on large projects, which typically boost CV sales, have been slower than anticipated. Consequently, Tata Motors’ CV business has struggled to deliver strong results this quarter.

Consolidated Outlook: Recovery with Caution
Improved operating leverage in JLR and the standalone entity is expected to drive a recovery in Tata Motors’ Q3FY2025 consolidated profit margins and net profit compared to Q2FY2025. However, the path to sustainable growth will hinge on several factors:

Global Luxury Auto Market: The global premium car market’s recovery remains uneven, with concerns around whether discounts will be needed to stimulate demand in 2025. Prolonged economic uncertainties and geopolitical risks could further impact consumer sentiment in key markets like Europe and the US.

EV Ramp-Up: Both JLR and Tata Motors’ domestic EV businesses need to accelerate growth to capture emerging opportunities. JLR’s transition to electric models will require significant investments and strategic partnerships to ensure competitiveness in the evolving global market.

Macroeconomic Uncertainty: Changes in US policies on duties, taxes, and oil prices could impact demand dynamics in key markets. Rising energy costs and inflationary pressures could further complicate the operating environment for global automakers.

While JLR’s progress in Q3FY2025 is encouraging, sustaining this momentum will require consistent execution and strategic clarity. Tata Motors must address its domestic challenges while leveraging JLR’s global recovery to build a stronger consolidated performance. The coming quarters will be critical in determining whether Tata Motors can achieve sustainable growth and enhance shareholder value.

Tata Motors’ ability to navigate these challenges will define its performance in 2025 and beyond. Its strategic focus on premium vehicles, EV transition, and operational efficiency will be key to overcoming headwinds and delivering long-term growth. Investors and stakeholders will closely monitor the company’s efforts to address domestic market weaknesses while capitalizing on JLR’s improving trajectory in global markets.

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Tata Motors Stock Slump: Analyzing the Decline and Road Ahead

Tata Motors Stock Slump: Analyzing the Decline and Road Ahead

Tata Motors stock is down 35% from its peak of ₹1,179, presenting a potential buying opportunity for those aware of the reasons behind the decline. The stock appears attractive from a valuation perspective due to its steep fall from August to date. Among the four leaders in the auto sector, Tata Motors has experienced the steepest decline during this period while ranking second with a 15.31% contribution to the sector. Let’s analyze the reasons behind this drop and whether it is sustainable.

Despite sector challenges, the Nifty Auto Index has shown resilience, partially recovering from a 19% decline over the last two months. As of December 26, the index remains 17% below its all-time high. In contrast, Tata Motors’ performance lags behind its peers: while M&M is trading 7% below its peak, Maruti Suzuki is down 20%, and Bajaj Auto has declined 31% over the same period. Tata Motors faces challenges across multiple business segments, including domestic passenger and commercial vehicles, as well as its premium brand, Jaguar Land Rover (JLR).

Reasons Behind the Steep Fall
CV Volume Struggles in Q2
Tata Motors, which holds a 38% market share in the domestic CV market, is now facing headwinds. In Q2FY25, domestic wholesale CV volumes declined by 19.6% YoY due to a slowdown in government infrastructure projects, reduced mining activity, and lower fleet utilization caused by heavy rains. These factors contributed to a revenue decline of 13.9% in Q2FY25 and 5.2% in the first half of the fiscal year.

Price Hike for Trucks and Buses (Effective January 1, 2025)
Tata Motors announced a price hike of up to 2% for its trucks and buses, effective January 1, 2025. This is the fourth price increase, reflecting the broader struggles faced by Indian automakers. The hike will vary across models and variants but will affect the entire commercial vehicle range. Additionally, the company recently announced a 3% price hike across its entire vehicle lineup, including electric models, citing rising input costs as the primary reason. These costs include a surge in commodity prices, steep import duties on raw materials, and persistent supply chain challenges.

Uncertainty in China and Europe Hurts JLR Performance
In Q2FY25, EBITDA declined 16% YoY, and margins dropped 230 basis points to 11.4%, attributed to JLR’s weaker-than-expected performance. JLR faced temporary supply constraints and ongoing economic challenges in Europe and China. Supply disruptions, including aluminum shortages and delayed shipments, along with a tough macroeconomic landscape in these regions, further pressured operations.

Slow Passenger Vehicle and EV Sales
Tata Motors’ passenger vehicles and EVs have also slowed down. The recently launched Curvv EV, which accounts for 20% of EV bookings, faced ramp-up issues. However, the company expects to resolve these problems and plans to launch three to four new variants in the second half of FY25.

Tata Motors Gears Up for Growth with EV Focus and Profitability Goals
After a challenging Q2 FY25, Tata Motors is focusing on strategic recovery, aiming to become net debt-free and boost profitability. A moderate recovery in the domestic market is anticipated, supported by festive demand and infrastructure investments. Easing supply issues are expected to enhance JLR’s wholesale performance. The company is targeting revenue of around ₹2.5 lakh crore for JLR, with an EBIT margin exceeding 8.5%, driven by a stronger focus on luxury and EV offerings.

The CV segment emphasizes innovation and service quality, while the PV division focuses on retail expansion and cost control. Tata Motors plans to mainstream EVs through a diversified portfolio and a robust ecosystem, preparing to capture significant market share. As supply constraints ease and demand improves in H2 FY25, the company remains cautious about global market conditions, particularly in China and Europe. By balancing growth initiatives with disciplined resource management, Tata Motors is positioning itself for sustained long-term growth.

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Automation key to post pandemic production
Autos, Hot Auto Threads - July 21, 2022

Automation key to post pandemic production

Automation key to post-pandemic production

The COVID-19 pandemic has an adverse effect on the entire economy.

The Cairn Oil’s Barmer plant which was managed by more than 7,500 employees on site reduced to 1,500 employees as the pandemic led to the lockdown of many manufacturing plants worldwide. Still, the oil and gas plant could recover 1.6 lakh barrels of oil every day. Before the pandemic, they used to recover 1.8 lakh barrels every day. This decrease in number is because of the low demand and not because of the labor shortages.

Still Cairn can manage the production because of its investment in automation and digitization.
The chief digital officer of Cairn, Anand Laxshmivarahan said that the organization will be focusing on cost optimization post-COVID-19. Do the companies will be willing to invest only in automation.

Companies like Tata Steel, Mahindra, Toyota, Tata motors, Maruti, etc. have ample methods to automate their product lines.

The government has set norms and guidelines for the company to operate amid lockdown such as companies must screen the temperature of the employees, provide them with protective hand gloves, provide them with additional medical insurance, employees should follow social distancing norms while working, etc has led the companies to think about employing machines than men.

 Mahindra & Mahindra’s Chief Human Resource Officer, Rajeshwar Tripathi says that the use of robots has significantly helped the automobile sector to grow. The company has already automated the body shop, the paint shop and some of its final assembly line.

Tata Steel, Vice President, HR, Suresh Tripathi said that Tata Steel employs thousands of contract workers for maintenance of machinery. Instead of that they can use sensors that can estimate the problem well in advance.

Ceat, HR Head, Milind Apte also has mentioned about adopting digitisation and automation.

In the long run automation will prove to be profitable and will generate greater return on investment and will also prevent such shutdowns. Automation although leads to less number of manpower, it will also need new set of skilled people.

 

 

 

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