Why Tata Motors shares plunged 9 per cent

Decline in revenue from passenger and commercial vehicles divisions impacted Tata Motors profit which fell 22 per cent to Rs 5,578 crore

Tata Motors shares plunged 9 per cent on the BSE on Thursday, January 30, after the company’s reported a 22 per cent fall in consolidated net profit to Rs 5,578 crore for the third quarter ended December 2024. The shares hit a new 52-week low of Rs Rs 684.25

The company had posted a consolidated net profit of Rs 7,145 crore in the same quarter last fiscal, Tata Motors said in a regulatory filing.

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Shares of Tata Motors were trading at Rs 702 (−50.50) down 6.71% on the BSE at 10:51 am on January 30.

The profit was impacted by a decline in revenue from its passenger and commercial vehicles divisions.

Its consolidated total revenue from operations stood at Rs 1,13,575 crore against Rs 1,10,577 crore in the year-ago period, it added. The total expenses were higher at Rs 1,07,627 crore compared to Rs 1,04,494 crore a year ago.

However, its British arm Jaguar Land Rover (JLR) delivered a robust third quarter in FY25, with record revenue of 7.5 billion pounds, up 1.5 per cent compared with the year-ago period. This was its ninth successive profitable quarter.

JLR said that while mindful of the challenging economic backdrop, it is on track to achieve its profitability and cash flow targets in FY25.

Tata Passenger Vehicles Q3 revenue was Rs 12,400 crore, down 4.3 per cent and volumes were steady at 1.4 lakh units, about 1.1 per cent growth, the company said.

“In Q3 FY25, we recorded wholesales of 1.4 lakh units, 1.1 per cent growth over Q3 FY24 and retail sales growth of 6 per cent over Q3FY24. This has allowed us to sharply reduce our channel inventory ahead of Q4 FY25,” Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility Managing Director Shailesh Chandra said.

On the road ahead for PVs, Tata Motors said in line with the growth rates seen in the first nine months, the PV industry is poised for moderate growth in FY25. Segment shifts in the industry are likely to continue with strong growth in the SUV segment and continued traction for emission-friendly powertrains.

In the commercial vehicles (CV) segment, Tata Motors said Q3 revenue was down 8.4 per cent at Rs 18,400 crore and domestic wholesale CV volumes were marginally lower at 91,100 units (91,900 units in Q3 FY24).

The company said it expects CV demand to improve in Q4 FY25 across most segments. The key aspects in 2025 will be the government’s focus on infrastructure spend and growth in end-use segments, which will augur well for the commercial vehicles industry.

Meanwhile, brokerage firm Jefferies has downgraded Tata Motors to an ‘Underperform’ rating from ‘buy’, drastically reducing its target price to Rs 660 per share from Rs 930.

Nuvama Institutional Equities too has cut its price target to Rs 720, while maintaining a ‘reduce’ call on the stock.