Tata Motors Limited · NSE:TMCV
Tata Motors — Q1 FY24 Earnings Presentation
57 slides from Tata Motors's earnings presentation, Jul 26, 2023
Slide 1: Cancellation of 'A' ORD shares and issue of ORD shares as consideration
TATA MOTORS Tata Motors Group Cancellation of ‘A’ ORD shares and issue of ORD shares as consideration Results for quarter ended June 30, 2023
Slide 2: Executive Summary
TATA MOTORS Executive Summary Cancellation of “A” ORD shares and issue of ORD shares as consideration 1 Tata Motors Board has approved a NCLT Scheme of Arrangement for cancellation of “A” ORD shares and issuance of ORD Shares as consideration for the cancellation / capital reduction 2 Every “A” ORD
Slide 3: Background: 'A' ORD shares trade at deep discount to ORD shares
TATA MOTORS Background “A” ORD shares trade at deep discount to ORD shares despite adequate liquidity In 2008, TML issued “A” ORD shares at a 10% discount to ORD with lower voting rights (1/10 th ) and higher dividend (by 5%) In 2009, SEBI disallowed companies to create new class of shares with diff
Slide 4: The proposed Scheme
TATA MOTORS The proposed Scheme Capital Reduction Consideration “A” ORD shares to be cancelled and ORD Shares issued as consideration Capital Reduction Ratio - 7 ORD shares for 10 ‘A’ ORD shares Tax Impact (Refer annexure) The transaction is taxable in the hands of “A” ORD shareholders only WHT taxe
Slide 5: Impact on TML share capital
TATA MOTORS Impact on TML share capital Capital reduced by 4%; Promoter voting rights diluted by 3.2% Pre Post Delta Promoter Public Total Promoter Public Total DVR / New Ord (# Cr) 3.9 47.0 50.9 2.7 32.9 35.6 -15.3 Ordinary(#Cr) 154.1 178.0 332.1 154.1 178.0 332.1 - Total (# Cr) 158.0 225.0 383.0 1
Slide 6: Benefits
TATA MOTORS Benefits The scheme benefits all shareholders and the company. “A” ORD shareholders The 30% discount proposed for the Capital Reduction Ratio is significantly lower than historical trends Will benefit from better liquidity in ORD shares Continue to participate in the TML story ORD Shareh
Slide 7: Q&A session
TATA MOTORS Q&A session - Cancellation of ‘A’ ORD shares and issue of ORD shares as consideration Please submit your questions in the Q&A textbox Please mention your name and name of the organization you represent along with the questions 7
Slide 8: Annexures
TATA MOTORS Annexures 8
Slide 9: Tax Implication of the Scheme for 'A' ORD shareholders
TATA MOTORS Tax Implication of the Scheme for “A” ORD shareholders Tax Treatment* Cancellation of ‘A’ ORD shares and issue of ORD shares will be taxable in the hands of A ORD shareholders The applicable WHT taxes for each “A” ORD holder will be settled by the Trust by selling requisite ORD shares an
Slide 10: Scheme operationalized through a Trust
TATA MOTORS Scheme operationalized through a “Trust” on behalf of “A” ORD holders TML 1 As per the Scheme, “A” ORD holders to approve creation of a “Trust” to receive and sell requisite new ORD shares on their behalf and appoint an independent trustee 2 TML to issue new ORD shares to the Trust as pe
Slide 11: Tata Motors Group Results for quarter ended June 30, 2023
TATA MOTORS Tata Motors Group Results for quarter ended June 30, 2023.
Slide 12: Safe harbour statement
TATA MOTORS Safe harbour statement Statements in this presentation describing the objectives, projections, estimates and expectations of Tata Motors Limited (the “Group”), Jaguar Land Rover Automotive plc (“JLR ”) and its business segments may be “forward-looking statements” within the meaning of ap
Slide 13: Product and other highlights
TATA MOTORS Product and other highlights BS6 Phase 2 transition completed successfully Altroz iCNG disrupts the market with no compromise of boot space in a CNG vehicle Nexon EV celebrates 50K sales milestone. 10K Tiago.EVs delivered in four months JLR Order book remains strong with 185k units, 76%
Slide 14: Q1: Revenue ₹102.2KCr, EBITDA 14.4%, PBT(bei) ₹5.3KCr
TATA MOTORS Q1: Revenue ₹ 102.2KCr, EBITDA 14.4%, PBT(bei) ₹ 5.3KCr Business continues to build momentum Q 1 F Y 2 4 | C o n s o l i d a t e d | Ind AS, ₹ K C r Global Wholesales (K units) YoY +5.4 % 305.9 348.9 322.2 Q1 FY23 Q4 FY23 Q1 FY24 EBITDA % YoY +700bps 7.4 13.3 14.4 Q1 FY23 Q4 FY23 Q1 FY24
Slide 15: EBIT 8.1%; Net Auto Debt reduces to ₹41.7 KCr
TATA MOTORS EBIT 8.1%; Net Auto Debt reduces to ₹ 41.7 KCr Margin improvement driven by JLR and Commercial Vehicles Q 1 F Y 2 4 | C o n s o l i d a t e d | Ind AS Revenue ₹ KCr 71.9 21.5 5.8 2.6 0.4 102.2 29.8% 8.1% 3.7% 0.5% Q1FY23 Volume & Mix 42.1% increase Price Translation Others Q1FY24 Profita
Slide 16: Jaguar Land Rover Automotive PLC Results
JAGUAR LAND ROVER AUTOMOTIVE PLC Results for the quarter ended June 30, 2023 RICHARD MOLYNEU X Chief Financial Officer JLR. 16
Slide 17: JLR Q1 Revenue 6.9b, EBITDA 16.3%, PBT (bei) £435m
Q1 Revenue 6.9b, EBITDA 16.3%, PBT (bei) £435m Financial performance continued to improve; 8.6% EBIT; £451m free cashflow, best JLR Q1 on record Q 1 FY 24 | Jaguar Land Rover | IFRS, £m Retails (K units) YoY 29.4% 78.8 102.9 102.0 Q1 FY23 Q4 FY23 Q1 FY24 Revenue £m YoY +56.7% 4,406 7,102 6,903 Q1 FY
Slide 18: Q1 FY24 Performance highlights
Q1 FY24 Performance highlights Volume & Revenue Q1 retails and wholesales increased significantly YoY, reflecting the continuing improvement in supply constraints. Range Rover / Range Rover Sport production ramping up to over 2,800 units per week on average in Q1. Order book remains strong with c.18
Slide 19: Q1 Wholesales of 93k, Retails of 102k by brand
Q1 Wholesales of 93k, up 30% YoY; Retails of 102k, up 29% YoY Wholesales slightly lower (down 1%) QoQ reflecting shipping schedules, while production was up QoQ FY 24 | Brands | Units i n 000 ’ s WHOLESALES* RANGE ROVER 33.0 47.8 45.7 Q1 FY23 Q4 Q1 FY23 FY24 DEFENDER 17.7 27.5 28.3 Q1 FY23 FQ4 Q1 Y2
Slide 20: Q1 Retails higher in all regions
Q1 Retails were higher in all regions compared to the prior year Wholesales higher in all regions except Europe compared to the prior year FY 24 | Region s | Units in 000’s WHOLESALES* UK 16.2 20.3 17.0 Q1 Q4 Q1 FY23 FY23 FY24 N. AMERICA 13.6 19.3 22.4 Q1 Q4 Q1 FY23 FY23 FY24 EUROPE 21.5 22.0 20.4 Q
Slide 21: Q1 FY24 PBT £435m up nearly £1b YoY
Q1 FY24 PBT £435m up nearly £1b YoY Driven by higher volume and positive mix; Increased investment in FME and Digital JLR Q1 FY24 | IFRS, £m Volumes 253 Mix 480 P&A 83 Other 13 Pricing 180 VME (1.4)% to (1.1)% 17 FME & Selling (100) Admin (61) Engineering and capitalisation 83 Other (40) Operational
Slide 22: Free cash flow positive £451m in Q1 FY24
Free cash flow positive £451m in Q1 FY24 JLR Cash profits well exceed investment spends; Working capital slightly positive Q1 FY24 | IFRS, £m D&A 538 Free cashflow excluding working capital £438m Payables 446 Receivables (9) Inventory (451) Other 27 435 800 (100) 1,135 (697) 13 Q1 FY22 to Q1 FY24: £
Slide 23: Total Q1 FY24 investment £0.7bn
TotalQ1 FY24 investment £0.7bn; Full year FY24 target remains £3b Engineering capitalisation rate 61%, up from 53% in Q4 FY23 reflecting maturation of vehicle programmes JLR Q1 FY24 | IFRS £m 320 203 523 174 697 Q1 FY24 Capitalised Engineering Expensed Engineering Total Engineering Capital Investmen
Slide 24: Business Update JLR
BUSINESS UPDATE JLR 24
Slide 25: Chip and other supply constraints continue to ease
Chip and other supply constraints continue to ease Reflects partnership agreements and stronger relationships with key suppliers JLR Units 000’s WHOLESALE VOLUME 100 95 90 85 80 75 70 65 60 55 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 COMMENTARY Q1 FY24 wholesales sl
Slide 26: Range Rover & Range Rover Sport production continues to grow
New Range Rover & Range Rover Sport production continues to grow New body shop installed in Solihull in Q2 will increase capacity by c. 30% in future quarters JLR AVERAGE WEEKLY RR / RRS PRODUCTION 1,100 1,600 2,300 2,600 2,800 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Note : Approximately 46 weeks of
Slide 27: Model developments
Model developments JLR RANGE ROVER EVOQUE 24 MY ON SALE NOW Evoque’s reductive exterior is enhanced by a new grille and super- slim jewel-like Pixel LED headlights with signature DRL. Range of hybrid powertrains offer increased range up to 39 miles. Inside, the latest technology and simplified user
Slide 28: Tata announces £4b investment in Gigafactory in the UK
Tata announces £4b investment in Gigafactory located in the UK JLR JLR TO BECOME ANCHOR CUSTOMER OF TATA’S GLOBAL BATTERY BUSINESS, AGRATAS Provides JLR with : Security of supply, based on renewable energy Supply chain localisation Full transparency across the value chain Political de-risking CHAIRM
Slide 29: Looking ahead
Looking ahead Remain committed to consistent, competitive cash accretive growth while deleveraging the business JLR OUTLOOK FOR FY 24 Remain optimistic on the demand despite near term uncertainties. Continue to anticipate moderate inflation. Q2 production and cashflow is expected to be lower than Q1
Slide 30: Tata Commercial Vehicles
TATA MOTORS Tata Commercial Vehicles Girish Wagh & PB Balaji (Includes Tata CV India, TML Smart City Mobility, TML CV Mobility, Tata Cummins JO results and Tata CV International) 30
Slide 31: Registration (Vahan) market share
Registration (Vahan) market share TATA MOTORS Performance impacted by BS6 Phase 2 vehicle availability in the quarter. Actions underway to step up performance Tata Commercial Vehicles | Domestic market share * Commercial Vehicles 41.7% 39.1% FY23 Q1 FY24 HGV+HMV MGV LGV Passenger 49.6% 45.4% 44.2% 3
Slide 32: Tata Commercial Vehicles – Volumes
Tata Commercial Vehicles – Volumes TATA MOTORS Volumes lower on account of seasonality and pre-buying in Q4FY23; exports remain subdued Tata Commercial Vehicles | India Business Volumes Wholesales (incl. exports ) (K units) Retails (domestic) (K units) YoY (15.0)% YoY (14.3)% 101.1 116.5 86.0 90.5 1
Slide 33: Tata CV Q1: Revenue ₹17.0KCr, EBITDA 9.4%
Q1: Revenue ₹ 17.0KCr, EBITDA 9.4%, PBT(bei) ₹ 0.9KCr TATA MOTORS Margins improve y-o-y on improved realizations and mix despite lower volumes Q 1 F Y 2 4 | Tata Commercial Vehicles | Ind AS, ₹ K C r Wholesales (K units) YoY (14.6) % Revenue ₹KCr YoY + 4.4 % PBT (bei) ₹KCr 118.7 103.7 Q1 FY23 Q1 FY2
Slide 34: EBIT at 6.5% (+370) bps; PBT (bei) ₹0.9K Cr
EBIT at 6.5% (+370) bps; PBT (bei) ₹ 0.9K Cr TATA MOTORS Cr. IndAS Margins improve on richer mix, higher realisations Q 1 F Y 2 4 | Tata Commercial Vehicles| Ind AS, ₹ Cr D&A and PDE : ₹(74) Cr IDT provision reversal: ₹ 114 Cr Others : ₹ (120) Cr (227) 804 80 2 937 135 302 PBT(bei) Q 1FY23 Realisati
Slide 35: Tata Commercial Vehicles – Overall update
Tata Commercial Vehicles – Overall update TATA MOTORS Key Highlights Bright Spots Focus areas Total Industry Volume in Q1 FY24 was 2% lower than Q1 FY23 EBITDA and EBIT Margins improved by 380 and 350 bps over Q1 FY23(1) VAHAN share impacted in Q1 partially impacted by constrained availability of so
Slide 36: Tata Commercial Vehicles – New business update
Tata Commercial Vehicles – New business update TATA MOTORS Electric Mobility 100 EV Buses deployed in Q1 FY24; 600 EV Buses are operational. ~600 EVs sold in the quarter. Focus on developing the ecosystem 31 EVSCs set up ramped up production capacity Variants for diverse applications introduced. Ded
Slide 37: Tata Passenger Vehicles
TATA MOTORS Image Image Tata Passenger Vehicles Shailesh Chandra & PB Balaji (Includes Tata PV, EV India, FIAPL JO results and International business ( PV + EV)) 37
Slide 38: Tata Passenger Vehicles – Sustained volume growth
Tata Passenger Vehicles – Sustained volume growth TATA MOTORS Tata Passenger Vehicles | India business Volumes Wholesales (incl. exports ) (K units) YoY 7.7% Exports 130.4 0.2 130.4 0.8 135.6 0.3 140.4 130.2 134.8 140.1 Q1 FY23 Q4 FY23 Q1 FY24 Domestic Market share(1) 11.4% 13.5% 14.2% F Y 22F Y 23
Slide 39: EVs continue to witness strong growth
EV’s continue to witness strong growth; 19K vehicles sold in Q1 FY24 TATA MOTORS “Go Live” complete; all EV sales now billed through TPEML Tata Passenger Electric Vehicles Wholesales (incl. exports ) EV Volumes YoY 104.8% 9,446 15,960 19,346 Q1 FY23 Q4 FY23 Q1 FY24 Network Cities Dealerships 250 75
Slide 40: Tata PV Q1: Revenue ₹12.8KCr, EBITDA 5.3%
Q1: Revenue ₹ 12.8KCr, EBITDA 5.3%, PBT(bei) positive TATA MOTORS Volumes continue to improve; Higher mix of EVs impact profitability. EV profitability to improve in H2 FY24 Q3 FY 23 | Tata Passenger Vehicles | IndAS, ₹ K C r Wholesales (K units) YoY + 7.7 % Revenue ₹KCr YoY + 11.1 % PBT (bei) ₹KCr
Slide 41: EBIT at 1.0% (+10) bps; PBT (bei) positive
EBIT at 1.0% (+10) bps; PBT (bei) positive Margins improve on better volumes, realisations and variable costs, offset by higher fixed expenses Q1FY24 | Tata Passenger Vehicles | IndAS, ₹ Cr TATA MOTORS ₹ Cr. IndAS FME : ₹(44)Cr Employee cost: ₹(76) Cr D&A and PDE : ₹(52)Cr Other fixed expenses : ₹(4
Slide 42: Business update – Q1 FY24
Business update – Q1 FY24 Vahan market share improvement in Q1; Well prepared to tackle Q2 challenges Tata Passenger and Electric Vehicles TATA MOTORS Key Highlights Industry In Q1 FY24, wholesales grew by 9%;EV wholesale grew by 154% to cross 26.7K for the first time SUV segment continues to grow.
Slide 43: Tata Motors (CV+PV)
Tata Motors (CV+PV) *TML, TMPVL, TPEML and Joint operations TCL and FIAPL. TATA MOTORS
Slide 44: Q1 FY24 Free Cash Flows ~₹(2.0) KCr
TATA MOTORS Connecting Aspirations Q1 FY24 Free Cash Flows ~₹ (2.0) KCr Q1 FY24 Cash profits well ahead of Capex; Adverse working capital movement due to seasonality Q1 FY24 | T at a Motors Domestic Business (CV+PV) | IndAS, ₹ Cr ( 1 ) Payables, acceptances ₹ 2,914 Cr Trade receivables ₹ 1,272 Cr In
Slide 45: Investment Spending in Q1 FY24 ₹2.0 KCr
Investment Spending in Q1 FY24 ₹ 2.0 KCr FY24 capex estimated at ~ ₹ 8 KCr as electrification investments step up Q1 FY24 | T at a Motors Dome sti c Busine ss ( 1 ) | IndAS, ₹ Cr TATA MOTORS Connecting Aspirations PV+EV CV 630 238 392 Q1 FY24 Capitalised R&D 444 225 219 Expensed R&D 1,074 463 611 To
Slide 46: TMF: Profitability restored
TMF: Profitability restored Continue to drive up portfolio quality and ROE TATA Motorsfinance Q1FY24 |Tata Motors Finance | IndAS, ₹( Cr INR) IndAS Q1 FY23 Q4 FY23 Q1 FY24 CV Market Share 25% 17% 12% PBT (bei)@ 71 (482) 22 ROE (Pre-tax) 5.1% - 1.9% AUM 45,065 43,338 42,154 GNPA % * 8.7% 8.3% 8.1% NN
Slide 47: Credit ratings continue to improve
Credit ratings continue to improve CARE, CRISIL, ICRA upgrades rating by 1 notch, Moody’s revises outlook to positive Rating Agencies Long Term Rating Moody’s B1 / Positive S&P BB / Stable CRISIL AA / Stable ICRA AA / Stable CARE AA / Stable TATA MOTORS Connecting Aspirations 47
Slide 48: Looking ahead
TATA MOTORS Looking ahead We remain committed to consistent, competitive, cash accretive growth whilst deleveraging the business Outlook We remain optimistic on demand despite near term uncertainties while anticipating moderate inflation Momentum to build through the year factoring in seasonality, i
Slide 49: Q&A session
TATA MOTORS Q&A session Please submit your questions in the Q&A textbox Please mention your name and name of the organization you represent along with the questions Thank you 49
Slide 50: Tata Motors Group: Additional details
Tata Motors Group : Additional details Results for the quarter ended June 30, 2023 TATA MOTORS 50
Slide 51: Tata Motors Group Financials – Q1 FY24
Tata Motors Group Financials Consolidated Revenue from operations Grant income/incentives Expenses: Quarter ended June 30, 2023 Tata JLR Commercial Vehicles 71,396 501 16,991 68 Tata Passenger Vehicles TATA MOTORS Rs Cr. IndAS Others* Consolidated 12,839 103 1,010 11 102,236 683 Cost of materials co
Slide 52: Tata Motors Group Financials – Q1 FY23
Tata Motors Group Financials Consolidated Revenue from operations Grant income/incentives Expenses: JLR Quarter ended June 30, 2022 Tata Commercial Vehicles 43,056 16,270 367 70 TATA MOTORS Consolidated Rs Cr. IndAS Tata Passenger Vehicles Others* 11,556 1,052 71,935 109 1 547 Cost of materialsconsu
Slide 53: Jaguar Land Rover Financials
Tata Motors Group Financials Jaguar Land Rover Q1 FY 24 | IFRS, £m Q1 FY23 Q4 FY23 Q1 FY24 Q1 v Q1 YoY Change Q1 v Q4 QoQ Change Revenues Material and other cost of sales Employee costs Other (expense)/income Product development costs capitalised Depreciation and amortisation 4,406 7,102 6,903 2,497
Slide 54: Adverse Q1 YoY operational FX offset partially by hedging
Adverse Q1 YoY operational FX offset partially by hedging Total FX £99m favourable after other FX revaluation, favourable unrealised commodity revaluation Q1 FY 24 YoY | IFRS, £m JLR (28) 159 99 32 (65) 37 (32) Operational Exchange Realised FX hedges FX Impact on EBIT (1) FX revaluation of net Other
Slide 55: Q1 FY24 PBT up £67m QoQ
Q1 FY24 PBT up £67m QoQ Q1 FY24 EBIT up to 8.6% due to reductions in contribution costs Q1 FY 24 | IFRS, £m 368 FME & Selling (69) L&OH 94 Engineering and capitalisation 31 ↑ Volumes (22) Pricing 15 Other 24 Μία 6 ↑ P&A 23 ↑ VME (0.5)% to (1.1)9% (37) Other 25 106 32 (22) Material cost Manufacturing
Slide 56: Debt profile
Debt profile Strong liquidity; debt maturities well spread out IFRS, £m JLR Debt maturity profile IndAS * Crores Total 6,486 Tata Domestic Business* TATA MOTORS Debt maturity profile Total 16,210 949 728 5,101 1,772 Undrawn RCF 1520 5,101 10,160 4,718 3,986 2,055 250 265 1,997 875 773 120 125 754 CY
Slide 57: China JV continues to deliver improved financial performance
China JV continues to deliver improved financial performance (Presented on 100% basis) Q1 FY23 FY23 Q1 FY24 Q1 v Q1 YoY Change Q1 FY 24 | IFRS, £m Retail volumes ('000 units) 11.0 Wholesale volumes ('000 units) 10.8 Revenue Profit/(Loss)-before tax Profit/(Loss)-after tax EBITDA Margin EBIT Margin 3