Tata Motors is gearing up to announce its earnings for the fourth quarter of FY25, and early estimates aren’t painting a very rosy picture. Market analysts expect the company’s profit after tax (PAT) to take a significant hit—falling by around 36% compared to the same period last year. The key culprit? Rising costs across segments, particularly at its luxury arm, Jaguar Land Rover (JLR).
What’s Driving the Profit Dip?
One of the biggest pressures on Tata Motors this quarter comes from increasing expenses. Higher input costs, more warranty provisions, and spending to keep customers engaged have all taken a toll—especially on JLR, which continues to face weak demand in major markets like China and Europe.
This isn’t just about global challenges either. Even back home, Tata Motors’ commercial and passenger vehicle segments are seeing mixed signals, which makes it harder for the company to offset those cost pressures.
Revenue: Flat, But Stable
On the revenue front, things are expected to stay mostly flat compared to last year. While Tata Motors has tried to push growth through a better product mix and strategic pricing, these efforts are being counterbalanced by lower sales volumes.
The commercial vehicle (CV) business, a long-standing stronghold for the company, has seen slower momentum due to cautious infrastructure spending and the high base effect from last year. Likewise, the passenger vehicle (PV) segment is also expected to report lower volumes, with some analysts predicting a 19% drop year-on-year.
A Closer Look at Key Segments
Commercial Vehicles (CV): This segment could show just modest growth, with only a 1% CAGR expected over the next couple of years. That’s largely due to flat demand and fewer big-ticket projects driving sales.
Passenger Vehicles (PV): Here, Tata is facing stiff competition and margin pressures. Discounts have risen and consumer sentiment has been a bit muted—both of which could hurt the bottom line.
Jaguar Land Rover (JLR): JLR remains under the spotlight. Its order book has shrunk—from 148,000 units in December to 133,000 units by March—highlighting a potential slowdown in future sales. With demand softening, especially in China and Europe, this could be a concern going forward.
What Are Analysts Saying?
Investor sentiment has cooled a bit, with several brokerage firms lowering their price targets for Tata Motors ahead of the results. The combination of weaker profitability, muted growth in domestic CVs, and a shrinking JLR order book is making some analysts cautious.
Still, Tata Motors has a few positives up its sleeve. It’s investing aggressively in electric vehicles (EVs) and remains committed to becoming net automotive debt-free by the end of FY25—a goal that signals long-term financial discipline.
