Tata Motors Passenger Vehicles Ltd reported an 80% year-on-year decline in net profit

$TMCV Tata Motors Passenger Vehicles Ltd reported an 80% year-on-year decline in net profit attributable to shareholders to ₹775 crore in the first quarter, as lower volumes and higher incentives put pressure on the profitability of its Jaguar Land Rover (JLR) business. Despite the sharp decline in profit, revenue from operations increased 9.2% year-on-year in the April-June quarter, supported by strong performance in the domestic market even as JLR wholesales declined. Profit before exceptional items and tax fell 59% YoY. Profit before tax from continuing and discontinued operations, excluding the exceptional gain from the disposal, declined ₹1,574 crore. Consolidated EBITDA margin narrowed to 7.4%, down from a year earlier. The pressure on profitability was largely driven by a difficult quarter for JLR. Wholesales at the luxury carmaker declined 9.2% YoY due to temporary supply disruptions, including a fire at a key component supplier, the ongoing Middle East conflict and the planned phase-out of Jaguar. JLR’s quarterly revenue fell 9.6% year-on-year. Its EBITDA margin declined 8.1%. Profit before tax and exceptional items dropped to £109 million. Along with weaker volumes, profitability was affected by higher variable marketing expenses, partly offset by structural cost savings. Tata Motors Passenger Vehicles also outlined the accounting treatment related to the restructuring of its former businesses. Under the NCLT-approved composite scheme, the commercial vehicle business was demerged into Tata Motors Ltd, while Tata Motors Passenger Vehicles Ltd was amalgamated with the company.