Tata Motors Q4 Profit Falls 51%, But Still Surprises the Market

Tata Motors has just announced its earnings for the last quarter of the financial year (January to March 2025), and there’s a lot for investors to digest. The company’s profit dropped sharply compared to the same time last year—but even with the fall, Tata Motors managed to do better than what most experts had expected.

Big Drop in Profit, But There’s a Catch

Tata Motors reported a net profit of ₹8,470 crore for the quarter. That’s a 51% drop from ₹17,528 crore in the same quarter last year. But last year’s numbers had a big one-time tax benefit of ₹9,000 crore, which made the profit look extra high. Without that unusual gain, this year’s numbers aren’t as bad as they seem at first glance.

Even after the sharp drop in profit, Tata Motors still beat what analysts had predicted for the quarter.

Revenue Steady, Cash Flow Healthy

The company earned ₹1.19 lakh crore in total revenue during the quarter, which is almost the same as last year. More importantly, Tata Motors is sitting on strong cash reserves. Its free cash flow (money left after expenses and investments) for the quarter was about ₹8,900 crore. The company has ₹4.2 billion in cash and low net debt of ₹0.7 billion. That’s good news—it means the company isn’t struggling with loans.

How Each Business Segment Performed

Jaguar Land Rover (JLR)

JLR, Tata’s luxury car brand based in the UK, is facing a few challenges. New trade tensions, especially a possible 25% tariff on foreign-made vehicles in the U.S., are causing uncertainty. Even so, JLR met its previous profit margin target of 8.5%. Sales went up slightly—by 1.1%—thanks to strong demand for models like Range Rover and Defender.

Commercial Vehicles (CV)

This part of Tata’s business, which includes trucks and buses, didn’t do as well. Domestic sales dropped by 7% compared to last year. That’s partly because many customers bought in advance last year due to changes in emission norms (BS6 Phase II). However, exports grew by 13%. Revenue for this segment rose a bit—by 1.6%—and margins also improved slightly, showing the company managed costs well.

Passenger Vehicles (PV)

The passenger vehicle division, which includes Tata cars and EVs, had a strong quarter. Revenue went up by 19%, reaching ₹14,400 crore. Profits in this segment improved too. Tata Motors remained a market leader in electric vehicles, holding a 73.1% share in India. EVs now make up 13% of Tata’s passenger vehicle sales, and CNG vehicles make up another 16%.

Dividend News for Shareholders

Even though profits dropped, Tata Motors decided to reward shareholders with a final dividend of ₹6 per share for the year. This shows the company is confident about its financial health.

What’s Next for Tata Motors?

Looking ahead to the current financial year (FY25), Tata Motors is cautiously optimistic. It expects steady demand in both passenger and commercial vehicle markets. The company plans to invest slightly more—about £3.5 billion—and aims to become net debt-free by the end of the year.

Tata Motors says it will keep focusing on launching new products, improving efficiency, and strengthening its brands across markets.