Tata Motors Limited · NSE:TMCV
Tata Motors — Q1 FY2024 Earnings Presentation
58 slides from Tata Motors's earnings presentation, Jul 25, 2023
Slide 1: Cover letter to stock exchanges
BSE Limited Listing Compliance Department First Floor, New Trading Ring National Stock Exchange of India Ltd. Rotunda Building, P J Towers, Exchange Plaza, Bandra Kurla Complex, Dalal Street, Fort, Mumbai 400 001 Bandra(E), Mumbai 400 051 July 25, 2023 Sc no – 17632 Dear Sir/Madam, Ref: ISIN: INE155
Slide 2: Tata Motors Group
Tata Motors Group Cancellation of ‘A’ ORD shares and issue of ORD shares as consideration Results for quarter ended June 30, 2023
Slide 3: Executive Summary: Cancellation of A ORD shares
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 shareholder
Slide 4: A ORD shares trade at deep discount to ORD shares
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 • TML issued additional “A” ORD shares through a QIP in 2010 with lower voting rights (1/10th) and higher dividend (by 5%) and a Rights Issue in 201
Slide 5: The proposed Scheme
The proposed Scheme Capital Reduction • “A” ORD shares to be cancelled and ORD Shares issued as consideration Consideration • Capital Reduction Ratio - 7 ORD shares for 10 ‘A’ ORD shares Tax Impact • The transaction is taxable in the hands of “A” ORD shareholders only (Refer annexure) • WHT taxes ap
Slide 6: Impact on TML share capital
Impact on TML share capital Capital reduced by 4%; Promoter voting rights diluted by 3.2% Promoter voting rights diluted Pre Post Delta by ~3.2% Promoter Public Total Promoter Public Total DVR / New Ord 3.9 47.0 50.9 2.7 32.9 35.6 -15.3 Post implementation of (# Cr) Scheme voting rights and 154.1 17
Slide 7: Benefits of the scheme
Benefits The scheme benefits all shareholders and the company. “A” ORD shareholders ORD Shareholders Tata Motors • The 30% discount proposed for • EPS accretive by ~4% • Capital structure streamlined the Capital Reduction Ratio is significantly lower than historical • Economic rights are not affecte
Slide 8: Q&A session
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 9: Annexures
TATA MOTORS Annexures
Slide 10: Tax Implication of the Scheme for A ORD shareholders
Tax Implication of the Scheme for “A” ORD shareholders • Cancellation of ‘A’ ORD shares and issue of ORD shares will be taxable in the hands of A ORD shareholders Tax Treatment* • The applicable WHT taxes for each “A” ORD holder will be settled by the Trust by selling requisite ORD shares and the ne
Slide 11: Scheme operationalized through a Trust
Scheme operationalized through a “Trust” on behalf of “A” ORD holders TML Trust Corpus: • Funded by TML 1 As per the Scheme, “A” ORD holders to approve creation of a • Corpus sufficient to meet Trust “Trust” to receive and sell requisite new ORD shares on their behalf and appoint an independent trus
Slide 12: Tata Motors Group: Results for quarter ended June 30, 2023
Tata Motors Group Results for quarter ended June 30, 2023
Slide 13: Safe harbour statement
Safe harbour statement Other Details Statements in this presentation describing the objectives, projections, estimates • Presentation format : The results provided represent the details on consolidated and expectations of Tata Motors Limited (the “Group”), Jaguar Land Rover segment level. The operat
Slide 14: Product and other highlights
Product and other highlights BS6 Phase 2 transition completed successfully Altroz iCNG disrupts the market with no Nexon EV celebrates 50K sales milestone. compromise of boot space in a CNG vehicle 10K Tiago.EVs delivered in four months JLR Order book remains strong with 185k Agratas announces inves
Slide 15: Q1: Revenue ₹102.2KCr, EBITDA 14.4%, PBT(bei) ₹5.3KCr
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 | IndAS, ₹ K C r PBT (bei) Global Wholesales Revenue ₹KCr (K units) ₹KCr YoY +5.4 % YoY 42.1 % 5.3 105.9 5.0 348.9 102.2 305.9 322.2 71.9 -5.0 Q1 FY23 Q4 FY23 Q1 FY24 Q1
Slide 16: EBIT 8.1%; Net Auto Debt reduces to ₹41.7 KCr
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 | IndAS Revenue ₹ KCr 0.4 5.8 2.6 21.5 102.2 71.9 29.8% 8.1% 3.7% 0.5% 42.1% increase Q1FY23 Volume & Mix Price Translation Others Q1FY24 Profitability (EBIT)
Slide 17: Jaguar Land Rover Automotive plc
JAGUAR LAND ROVER AUTOMOTIVE PLC R I C H A R D M O LY N E U X Chief Financial Officer Results for the quarter ended June 30, 2023 16
Slide 18: 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 F Y 2 4 | J a g u a r L a n d R o v e r | I F RS , £ m Retails Revenue PBT (bei)(1) (K units) £m £m YoY + 56.7 % 435 368 YoY 29.4% 7,102 6,903 102.9 10
Slide 19: Q1 FY24 Performance highlights
Q1 FY24 Performance highlights • Q1 retails and wholesales increased significantly YoY, reflecting the continuing improvement in supply constraints. Volume & • Range Rover / Range Rover Sport production ramping up to over 2,800 units per week on average in Q1. Revenue • Order book remains strong wit
Slide 20: 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 FY24 | Brands | Units in 000’s TOTAL 94.6 93.3 47.8 45.7 71.8 WHOLESALES* 33.0 27.5 28.3 17.7 10.2 9.6 9.0 10.9 9.7 10.3 Q1 Q4 Q1 Q1 Q4 Q1
Slide 21: Retails and wholesales by region
Q1 Retails were higher in all regions compared to the prior year Wholesales higher in all regions except Europe compared to the prior year FY24 | Regions |Units in 000’s UK N. AMERICA EUROPE CHINA OVERSEAS JLR POWERTRAIN 22.4 MIX(RETAILS) 21.5 22.0 21.0 22.0 20.3 19.3 20.4 WHOLESALES* 16.2 17.0 13.6
Slide 22: 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 Key insights FME & Selling (100) Operational FX (65) • Q1 EBIT margin 8.6% driven by Admin (61) higher volume and mix Realised FX derivatives 37 o 21K better wholesales Engineering a
Slide 23: Free cash flow positive £451m in Q1 FY24
Free cash flow positive £451m in Q1 FY24 Cash profits well exceed investment spends; Working capital slightly positive Free cashflow excluding Payables 446 D&A 538 working capital £438m Receivables (9) (100) Inventory (451) Other 27 800 (697) 1,135 13 Q1 FY22 to Q1 FY24: 435 £(1,491)m(1) 451 PBT Non
Slide 24: Total Q1 FY24 investment £0.7bn
Total Q1 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 174 697 203 523 320 Capitalised Expensed Total Capital Total Q1 FY24 Engineering Engineering Engineering Investment Investment Q1
Slide 25: Business Update
BUSINESS UPDATE 24
Slide 26: 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 Units 000’s WHOLESALE VOLUME COMMENTARY 100 • Q1 FY24 wholesales slightly lower than Q4 reflecting 95 shipping timings while production was up in the 90 quarter 85 • Chip
Slide 27: New 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 AVERAGE WEEKLY RR/RRS PRODUCTION 2,800 2,600 2,300 1,600 1,100 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Note: Approximately 46 weeks of produc
Slide 28: Model developments
Model developments RANGE ROVER EVOQUE 24MY DISCOVERY SPORT 24MY ON SALE NOW AVAILABLE TO ORDER Evoque’s reductive exterior is enhanced by a new grille and super- Discovery Sport is versatile by design and ready for family slim jewel-like Pixel LED headlights with signature DRL. adventures, with
Slide 29: Tata announces £4b investment in Gigafactory in the UK
Tata announces £4b investment in Gigafactory located in the UK JLR TO BECOME ANCHOR CUSTOMER OF TATA’S CHAIRMAN WITH UK PRIME MINISTER GLOBAL BATTERY BUSINESS, AGRATAS RISHI SUNAK AT THE ANNOUNCEMENT Provides JLR with : Security of supply, based on renewable energy Supply chain localisation Fu
Slide 30: Looking ahead
Looking ahead Remain committed to consistent, competitive cash accretive growth while deleveraging the business OUTLOOK FOR FY24 • Remain optimistic on the demand despite near term uncertainties. • Continue to anticipate moderate inflation. • Q2 production and cashflow is expected to be lower than Q
Slide 31: Tata Commercial Vehicles
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 32: Registration (Vahan) market share
Registration (Vahan) market share 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 44.2% 49.6% 45.4% 34.0% 41.7% 37
Slide 33: Tata Commercial Vehicles - Volumes
Tata Commercial Vehicles - Volumes Volumes lower on account of seasonality and pre-buying in Q4FY23; exports remain subdued Tata Commercial Vehicles |India Business Volumes Wholesales (incl. exports ) Retails (domestic) (K units) (K units) Exports YoY (15.0)% YoY (14.3)% 116.5 114.2 101.1 4.0 90.5 5
Slide 34: Q1: Revenue ₹17.0KCr, EBITDA 9.4%, PBT(bei) ₹0.9KCr
Q1: Revenue ₹ 17.0KCr, EBITDA 9.4%, PBT(bei) ₹ 0.9KCr Margins improve y-o-y on improved realizations and mix despite lower volumes Q 1 F Y 2 4 | T a t a C o m m e r c i a l V e h i c l e s | IndAS, ₹ K C r Wholesales Revenue PBT (bei) (K units) ₹KCr YoY (14.6) % YoY + 4.4 % ₹KCr 21.2 118.7 17.0 1.7
Slide 35: EBIT at 6.5% (+370) bps; PBT (bei) ₹0.9K Cr
EBIT at 6.5% (+370) bps; PBT (bei) ₹ 0.9K Cr Margins improve on richer mix, higher realisations Q 1 F Y 2 4 | T a t a C o m m e r c i a l V e h i c l e s | IndAS, ₹ Cr ₹ Cr. IndAS D&A and PDE : ₹(74) Cr IDT provision reversal: ₹ 114 Cr Others : ₹ (120) Cr EBIT % 2.8% 0.8% 4.9% (1.4)% (0.6)% 0.0% 6.5
Slide 36: Tata Commercial Vehicles – Overall update
Tata Commercial Vehicles – Overall update Key Highlights Bright Spots Focus areas • Total Industry Volume in Q1 FY24 was 2% lower • M&HCVs grew by 3% and Passenger carriers by • With improved availability in Q2, will continue than Q1 FY23 11.5% over Q1 FY23 to focus on retail and realization, to dri
Slide 37: Tata Commercial Vehicles – New business update
Tata Commercial Vehicles – New business update Electric Mobility TML Smart City Mobility Solutions Ltd Digital 100 EV Buses deployed in Q1 FY24; 600 EV • DTC CESL operations started from 29th Jun’23. • Fleet Edge has now more than 434K vehicles on Buses are operational. 200 buses deployed so far p
Slide 38: Tata Passenger Vehicles
Tata Passenger Vehicles Shailesh Chandra & PB Balaji (Includes Tata PV, EV India, FIAPL JO results and International business(PV+EV)) 37
Slide 39: Tata Passenger Vehicles – Sustained volume growth
Tata Passenger Vehicles – Sustained volume growth Tata Passenger Vehicles |India business Volumes Wholesales (incl. exports ) Retails (domestic) (K units) (K units) Exports YoY 7.7% YoY 6.1% 135.6 140.4 132.5 130.4 0.3 124.8 126.1 0.2 0.8 130.2 134.8 140.1 Q1 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q4 FY23 Q1
Slide 40: EVs continue to witness strong growth; 19K vehicles sold
EV’s continue to witness strong growth; 19K vehicles sold in Q1 FY24 “Go Live” complete; all EV sales now billed through TPEML Tata Passenger Electric Vehicles Wholesales (incl. exports ) EV Volumes VAHAN registration market share(1) YoY 104.8% 19,346 15,960 86.5% 83.9% 76.0% 9,446 Q1 FY23 Q4 FY23 Q
Slide 41: Q1: Revenue ₹12.8KCr, EBITDA 5.3%, PBT(bei) positive
Q1: Revenue ₹ 12.8KCr, EBITDA 5.3%, PBT(bei) positive Volumes continue to improve; Higher mix of EVs impact profitability. EV profitability to improve in H2 FY24 Q 3 F Y 2 3 | T a t a P a s s e n g e r V e h i c l e s | IndAS, ₹ K C r Wholesales Revenue PBT (bei) YoY + 7.7 % ₹KCr YoY + 11.1 % (K uni
Slide 42: 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 ₹ Cr. IndAS Q 1 F Y 2 4 | T a t a P a s s e n g e r V e h i c l e s | IndAS, ₹ Cr FME : ₹(44)Cr Employee cost : ₹(76) Cr D&A and PDE : ₹(52)Cr Other fixed ex
Slide 43: Business update – Q1 FY24
Business update – Q1 FY24 Vahan market share improvement in Q1; Well prepared to tackle Q2 challenges Key Highlights Bright spots Challenges • In Q1 FY24, wholesales grew by 9%; • Strong booking pipeline for newly • High base effect launched models • Delay of main festival season to Oct • EV wholesa
Slide 44: Tata Motors (CV+PV)
Tata Motors (CV+PV) *TML, TMPVL, TPEML and Joint operations TCL and FIAPL.
Slide 45: Q1 FY24 Free Cash Flows ~₹(2.0) KCr
Q1 FY24 Free Cash Flows ~₹ (2.0) KCr Cash profits well ahead of Capex; Adverse working capital movement due to seasonality Q 1 F Y 2 4 | T a t a M o t o r s D o m e s t i c B u s i n e s s ( C V + P V ) | I n d A S , ₹ C r (1) Payables, acceptances ₹ 2,914 Cr Trade receivables ₹ 1,272 Cr Inventories
Slide 46: 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 Q 1 F Y 2 4 | T a t a M o t o r s D o m e s t i c B u s i n e s s (1) | I n d A S , ₹ C r PV+EV CV 890 1,964 369 444 832 1,074 521 630 225 219 463 238 1,132 392 611 Capitalised Expensed
Slide 47: TMF: Profitability restored
TMF: Profitability restored Continue to drive up portfolio quality and ROE Q 1 F Y 2 4 | T a t a M o t o r s F i n a n c e | IndAS, ₹ ( C r I N R ) • Concerted collection efforts continues to deliver results. Collection Q1 Q4 Q1 Efficiency for Q1 FY24 96.6% as against 94.6% in Q1 FY23 IndAS FY23 FY2
Slide 48: 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 47
Slide 49: Looking ahead
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, improved
Slide 50: Q&A session Thank you
Q&A session Thank you Please submit your questions in the Q&A textbox Please mention your name and name of the organization you represent along with the questions 49
Slide 51: Tata Motors Group: Additional details
Tata Motors Group : Additional details Results for the quarter ended June 30, 2023 50
Slide 52: Tata Motors Group Financials (Q1 FY24)
Tata Motors Group Financials Consolidated Quarter ended June 30, 2023 Rs Cr. IndAS Tata Tata JLR Commercial Passenger Others* Consolidated Vehicles Vehicles Revenue from operations 71,396 16,991 12,839 1,010 102,236 Grant income / incentives 501 68 103 11 683 Expenses : Cost of materials consumed (4
Slide 53: Tata Motors Group Financials (Q1 FY23)
Tata Motors Group Financials Consolidated Quarter ended June 30, 2022 Rs Cr. IndAS Tata Tata JLR Commercial Passenger Others* Consolidated Vehicles Vehicles Revenue from operations 43,056 16,270 11,556 1,052 71,935 Grant income / incentives 367 70 109 1 547 Expenses : Cost of materials consumed (26,
Slide 54: Tata Motors Group Financials: Jaguar Land Rover
Tata Motors Group Financials Jaguar Land Rover Q 1 F Y 2 4 | I F RS , £ m Q1 v Q1 YoY Q1 v Q4 QoQ Q1 FY23 Q4 FY23 Q1 FY24 Change Change Revenues 4,406 7,102 6,903 2,497 (199) Material and other cost of sales (2,762) (4,327) (4,026) (1,264) 301 Employee costs (570) (696) (716) (146) (20) Other (expen
Slide 55: 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 FY24 YoY | IFRS, £m 32 131 159 99 (28) (65) 37 (32) Operational Exchange Realised FX hedges FX Impact on EBIT FX revaluation of net Other FX r
Slide 56: 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 FY24 | IFRS, £m Operational FX (100) Key insights FME & Selling (69) Realised FX derivatives 47 • Supplier, inflation & L&OH 94 commodity claims reduced Revaluation (32) Engineering and quarter over quarter 31
Slide 57: Debt profile
Debt profile Strong liquidity; debt maturities well spread out JLR IndAS Tata Domestic Business* IFRS, £m Debt maturity profile ₹ Crores Debt maturity profile Total Total 16,210 6,486 949 728 5,101 1,772 Undrawn RCF 5,101 10,160 1520 4,718 250 265 3,986 2,055 1,997 875 773 * 120 125 754 CY23 CY24 CY
Slide 58: China JV continues to deliver improved financial performance
China JV continues to deliver improved financial performance Q 1 F Y 2 4 | I F RS , £ m (Presented on 100% basis) Q1 Q4 Q1 Q1 v Q1 YoY Q1 v Q4 QoQ FY23 FY23 FY24 Change Change Retail volumes ('000 units) 11.0 12.7 12.9 1.9 0.2 Wholesale volumes ('000 units) 10.8 12.7 13.0 2.3 0.3 Revenue 363 403 430