Tata Motors FY25 Results – Detailed Financial Performance & Key Highlights

Tata Motors Limited (TML), established in 1945, designs, manufactures, and sells a wide range of automotive vehicles. It is a leading global automobile manufacturer with a diverse portfolio of mobility solutions. This article focuses on Tata Motors' FY25 results, covering its financial performance and key highlights.

Table of Contents 

1. Business Segments
2. Key Presence
3. Financial and Operational Metrics (FY25)
4. Segment Wise Revenue Mix (FY25)
5. Financial Ratios (FY25)
6. Sustainability Initiatives
7. Board and Governance
8. Financial Decisions
9. Demerger and Merger
10. Conclusion
11. FAQs

Business Segments

Tata Motors' operations are structured into three primary business segments:

• Tata Commercial Vehicles (Tata CV): As India's largest commercial vehicle manufacturer, this segment is a cornerstone of the company's business. It holds the #1 market position in the Indian CV sector, offering the widest portfolio of products and services. Its offerings range from heavy-duty trucks like the Prima to small commercial vehicles like the Ace EV, and buses like the Starbus
• Tata Passenger Vehicles (Tata PV & EV): This segment has established Tata Motors as a formidable force in the Indian automotive market, securing the position of the #3 passenger vehicle player while simultaneously leading the market as the #1 EV player. The business is recognised for its portfolio of vehicles that blend modern design, advanced technology, and the highest safety standards, catering to diverse mobility needs.
• Jaguar Land Rover (JLR): JLR represents Tata Motors' global luxury vehicle arm. It is structured as a "house of four distinct and engaging brands": Range Rover, Defender, Discovery, and Jaguar. The segment's vision is to become the "proud creators of the world's most desirable modern luxury brands for the most discerning clients". JLR is undergoing a strategic transformation, with a strong focus on electrification and sustainability, aiming to offer electric versions of all its brands by the end of the decade.

Want to see how JLR’s transformation connects with the group’s global roadmap? Read about Tata Motors international business strategy to understand its overseas growth model.

Key Presence 

Tata Motors operates in over 100 countries, with 24 manufacturing sites and 8 R&D sites, supported by a collective workforce of over 85,000 people.

Financial and Operational Metrics (FY25)

Commercial Vehicles (CV)

In FY25, the Commercial Vehicles segment of Tata Motors experienced a decrease in sales volume and revenue compared to the previous year. However, the business demonstrated improved profitability, with notable increases in both EBITDA and EBIT margins, alongside an expansion of its sales and service network.

Passenger Vehicles (PV) - excluding EV

The Passenger Vehicles segment of Tata Motors saw a slight moderation in sales volume and revenue in FY25. Despite this, the business improved its operational efficiency, reflected in a 40 basis point increase in EBITDA margin, and continued to expand its physical footprint with a significant rise in sales and service workshops.

Electric Vehicles (EV)

Tata Motors' Electric Vehicles business demonstrated a remarkable improvement in profitability in FY25, with its EBITDA margin turning positive at 1.2% from a negative 7.1% in the prior year. This was achieved alongside a significant expansion of the public charging infrastructure and sales network, even as revenue decreased.

Jaguar Land Rover (JLR)

Jaguar Land Rover's performance remained stable in FY25, with sales volumes and revenue nearly flat compared to the previous year. The segment successfully maintained its EBIT margin at 8.5% and recorded a positive net cash position of £278 million, demonstrating financial resilience.

Segment Wise Revenue Mix (FY25)

The total vehicle sales for FY25 (excluding China joint venture):

• Utility vehicles are the largest and fastest-growing sector, where contribution to total sales grew substantially from 53.7% in FY24 to 60.2% in FY25.
• Conversely, the passenger cars segment experienced a sharp decline. Its share of total sales fell from 17.0% in the previous year to 11.1% in FY25.
• The commercial vehicle portfolio showed varied results. Sales for Intermediate and Light Medium Commercial Vehicles and CV Passenger Vehicles increased their share of total sales to 5.3% and 4.1% respectively. However, the Heavy Commercial Vehicles and SCV and Pick Up segments saw their contributions decline to 8.5% and 10.8% respectively.

Market share in various categories of commercial vehicles in the Indian market based on Vahan registration volumes:

Tata Motors strengthened its position in the competitive Passenger Vehicles segment, with its market share increasing to 13.9% in FY25 from 13.5% in FY24. While the company maintained a dominant presence in the Heavy Goods and Motor Vehicles (HGV+MGV) category with a 48.8% share, its overall market share in the Total Commercial Vehicles segment declined, falling from 41.7% in FY24 to 39.1% in FY25. The decline in the total CV market share was driven by decreases across several sub-segments. The most significant drop was in Medium Goods Vehicles, which fell to 37.5% from 44.2%. Light Goods Vehicles and CV Passenger Vehicles also saw their market shares decrease to 34.3% and 35.0% respectively.

Financial Ratios (FY25)

The company’s operating margin decreased marginally, and the Net Profit margin also faced a noticeable dip. This suggests that although the company remained profitable, it faced high pressures on its margins. The EBITDA and EBIT margins remained relatively stable. This indicates that at an operational level, the company’s core performance is consistent.

The debt-equity ratio has almost halved, the debt service coverage ratio and the Interest service coverage ratio have significantly increased. This demonstrates improved ability to meet debts, reinforcing the company’s enhanced financial stability. 

The ROCE and ROE are robust figures. The sudden huge decrease in ROE is due to an expanding equity base due to high profits. EPS is also remaining consistently strong. Dividend per share at ₹6.00, signalling confidence in its financial position and commitment to shareholder returns.

The debtors' turnover ratio improved to 29.12 times, indicating receivables are collected quickly. Conversely, the inventory turnover ratio decreased slightly, suggesting a minor slowdown.

To gauge how investors are valuing the company post its FY25 results, check the latest Tata Motors share price, updated charts, and key valuation ratios.

Sustainability Initiatives 

Project Aalingana, which is a Sanskrit word for 'embrace'. This strategy is built on three interconnected pillars with ambitious goals:

• Driving Net Zero: This pillar focuses on decarbonization with clear targets, including achieving net-zero emissions by 2040 for Passenger Vehicles and 2045 for Commercial Vehicles, and sourcing 100% renewable electricity by 2030.
• Pioneering Circular Economies: This involves applying a circular approach to minimise resource use and waste. Key goals include achieving 'Zero Waste to Landfill' and becoming 'Water Neutral' by 2030, guided by the company's internal 'TATVA' framework
• Preserving Nature and Biodiversity: This pillar focuses on implementing a comprehensive, science-driven approach to biodiversity management and conservation through flagship projects and aligning with global biodiversity frameworks.

Board and Governance

• Re-appointment of Directors: The Board recommended the re-appointment of Mr. Kosaraju Veerayya Chowdary as a Non-Executive Independent Director for a second term. The re-appointment of Mr. N Chandrasekaran, who retires by rotation, is also proposed.
• Appointment of New Director: The Board appointed Mr. Guenter Karl Butschek as an Additional and Non-Executive Independent Director, effective May 1, 2025, subject to shareholder approval.

Financial Decisions

• Dividend Recommendation: The Board of Directors recommended a final dividend of ₹6 per Ordinary Share for the financial year 2024-25.
• Issuance of Debentures: During the year, the company issued and allotted Rated, Listed, Unsecured, and Redeemable Non-Convertible Debentures (NCDs) aggregating to ₹2,000 crore on a private placement basis.

Demerger and Merger 

• Forthcoming Demerger: The company is in the process of a demerger to create two distinct, publicly listed entities, one focused on commercial vehicles and the other on passenger vehicles (including JLR and EVs). This strategic move is aimed at enabling sharper focus, greater agility, and distinct growth strategies for each business. The demerger is anticipated to become effective on October 1, 2025.
• Merger of Finance Arm: The Board consented to a Scheme of Arrangement for the merger of Tata Motors Finance Limited (TMFL), a step-down subsidiary, with Tata Capital Limited (TCL). The scheme became effective on May 8, 2025.

ET NOW has shared an insightful discussion with PB Balaji on Tata Motors’ Q4 FY25 results — you should watch it to understand the profit beat despite challenges.

Conclusion 

In a concise analysis, fiscal year 2025 was a landmark period for Tata Motors, where it achieved its highest-ever consolidated profits and, most critically, became a net auto cash positive entity, marking the successful end of its long-term deleveraging journey. This success was underpinned by a decade-best profit from the Jaguar Land Rover (JLR) division, record profitability in the Commercial Vehicles (CV) business, and strategic market share gains in the high-growth SUV and CNG segments of its Passenger Vehicles (PV) unit. However, this strong performance is now overshadowed by significant external headwinds, including geopolitical tariffs, a slowdown in key international and domestic markets, and intensifying competition, which explains the recent disconnect between the company's results and its stock performance. The narrative has thus shifted from a "turnaround" story to one of "sustainable growth," with the company's future success now dependent on its ability to navigate the cautious outlook for FY26 while executing its strategic demerger and ambitious long-term investment plans.

Want to compare two industry leaders on valuation, strategy, and market share? Read Tata Motors vs Maruti Suzuki for a complete financial and strategic comparison.

FAQs

Q1: What were the key financial highlights for Tata Motors in FY25?

In FY25, Tata Motors achieved its highest-ever consolidated profits and, a significant milestone, became a net auto cash positive entity. This success was driven by a record-breaking performance from JLR, strong profitability in the CV business, and market share growth in its Indian PV segment.

Q2: How did each of Tata Motors' business segments perform in FY25?

• Commercial Vehicles (CV): Experienced a decline in sales volume and revenue but saw improved profitability with increased EBITDA and EBIT margins.
• Passenger Vehicles (PV): Saw a slight drop in sales and revenue, but improved operational efficiency led to a 40 basis point increase in EBITDA margin.
• Electric Vehicles (EV): Showcased remarkable progress by turning its EBITDA margin positive (1.2% from -7.1%), despite a decrease in revenue.
• Jaguar Land Rover (JLR): Maintained stable performance with flat sales and revenue, holding an 8.5% EBIT margin and achieving a net cash position.

Q3: What is the significance of Tata Motors' demerger plan?

The demerger, which will create two separate publicly listed entities for commercial and passenger vehicles, is a strategic move to enable a sharper focus, greater agility, and distinct growth strategies for each business. This is expected to unlock synergies and enhance shareholder value.

Q4: What is "Project Aalingana" and what are its key goals?

Project Aalingana is Tata Motors' sustainability strategy, built on three pillars: "Driving Net Zero," "Pioneering Circular Economies," and "Preserving Nature and Biodiversity." Its ambitious goals include achieving net-zero emissions by 2040 for PVs and 2045 for CVs, and becoming "Water Neutral" by 2030.

Q5: What challenges is Tata Motors facing moving into FY26?

While FY25 was strong, Tata Motors face significant external headwinds in FY26, including geopolitical tariffs, a slowdown in key international and domestic markets, and intensifying competition. The company's focus has shifted from a "turnaround" story to one of "sustainable growth" amidst this cautious outlook.