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New Delhi: Auto major Tata Motors, which hopes to deliver positive cash flows further, is targeting a net zero debt by FY25. The company said its Indian business delivered a net debt that touched its lowest in the last 15 years at INR 6,200 crore in FY23.
The automaker has announced a final dividend of INR 2 per Ordinary Share and INR 2.1 per share for DVR shareholders subject to approval by the shareholders at the AGM. It declared dividends for the first time since 2016.
For the year ended March 31, 2023, Tata reported a consolidated net profit of INR 2,414 crore as compared with a net loss of INR 11,441 crore in FY22. Total consolidated revenue stood at INR 3.46 lakh crore in the period under review, which was its all-time high, as against INR 2.78 lakh crore in the previous fiscal year.
PB Balaji, Group Chief Financial Officer, Tata Motors said, “The year ended on a strong note with all automotive verticals delivering robust performances leading to multiple all-time high achievements. The distinct strategy employed by each business is delivering, in unison, leading to a sharp improvement in overall results. We remain confident on growth with cash flow generation, to achieve our stated goals.”
“This year we will get as close to net debt free as possible,” he said.
The company has lined up a total capex (JLR + domestic business) of INR 38,000 crore in the current fiscal. The total capex stood at INR 30,000 crore in FY22.
The automaker remains optimistic on the demand situation despite near term uncertainties and expects a moderate inflationary environment in the near term. “In this context, we aim to further improve and deliver a strong performance in FY24. The momentum is expected to build through the year factoring in seasonality, stabilization of JLR supply chain and post RDE impact in India,” it said.
For the company’s luxury car unit Jaguar Land Rover (JLR) in FY23, full year revenue stood at 22.8 billion pounds, up 25% compared with FY22, as chip supply improved further.
The company targets to bring down JLR’s current net debt which stands at 3 billion pounds to 1 billion pound by the end of the current fiscal year.
Adrian Mardell, Interim CEO, JLR said, “For the fiscal year ahead, while we are mindful of the headwinds that remain, our target is to increase EBIT margins to over 6% and deliver significantly positive free cash flow to reduce our net debt further, while increasing investment to £3 billion.”
Tata Motors domestic performance
The automakers’ domestic passenger vehicle wholesales stood at 5.38 lakh units in FY23, up 45% as compared with the previous fiscal year. Tata crossed the 50,000 mark for annual EV sales. EV penetration in the sales stood at 9% and CNG penetration at 8% during FY23.
For the passenger vehicle business, Tata expects the industry growth to moderate due to a strong base effect and other macro factors like rising interest rates, inflation, and the cost impact from progressive regulatory norms.
During the FY23, the automaker completed the acquisition of Ford India’s Sanand plant complete, launched its most affordable model Tiago EV and received the second tranche of investment of INR 3,750 crore from TPG Rise Climate.
Commercial vehicle wholesales in domestic market stood at 3.92 lakh units in FY23, up 22% as compared to FY22.
Going forward, the automaker believes that the advance buying in Q4 FY23 in anticipation of price hikes post BS-VI Phase-II will have near term impact on demand. “With the government’s continuing thrust on infrastructure development, we remain optimistic about the overall CV demand in FY24 despite near term challengers on interest rates, fuel prices and inflation.We will aim for higher realizations and cost savings to secure double-digit EBITDA margins for FY24 and improve the performance of all business verticals.”
