In an exclusive post-earnings interview with Buisness channel Tata Motors’ Chief Financial Officer, P.B. Balaji, discussed the company’s performance for the quarter gone by, shared insights into key global and domestic challenges, and explained why the automaker has opted to withhold forward guidance at this point.
Strong Q4, But Caution Ahead
Balaji began by acknowledging that the fourth quarter delivered strong results. However, unlike in previous quarters, the company has refrained from issuing detailed guidance for the upcoming quarters. The reason: an unprecedented level of external uncertainty, particularly concerning tariff-related developments between the US and UK, which significantly affect the Jaguar Land Rover (JLR) division.
“We’re facing serious ambiguity,” Balaji noted. “We don’t yet know whether the newly agreed tariffs between the US and UK are applicable retrospectively from April 3 or only prospectively. These changes could materially impact JLR’s profitability, and until we have clarity, it would be irresponsible to offer guidance.”
He mentioned that by Tata Motors’ Investor Day on June 16, more information should be available, allowing the company to reassess and provide credible updates.
Strategic Focus: Discipline and Long-Term Planning
Despite the challenges, Balaji emphasized that Tata Motors' core operating philosophy remains unchanged: maintain financial discipline, continue product investments, and fund future developments through operating cash flows instead of debt.
“There’s no change in our capital allocation strategy. We are not pulling back on investments, and our debt-reduction journey remains on track,” he said. “We’re building the business for the next 3–4 years, not just the next two quarters.”
JLR: Market-Wise Performance Insights
Providing a market-wise performance breakdown for JLR, Balaji said:
UK: The most promising market, showing strong recovery after resolving last year’s insurance and theft-related issues.
Rest of the World (Middle East, India, etc.): Performing well and contributing steadily.
Europe: Seeing a positive uptick.
China: Stabilized after recent slowdowns; Tata’s performance is ahead of competitors.
US: The most uncertain due to tariff hikes—from 2.5% to 25% on certain models.
He stressed the need for clarity on the tariff regime before offering guidance, as these levies significantly affect vehicles exported from European plants to the US.
Domestic EV Leadership and Growing Competition
Tata Motors has been a pioneer in the domestic electric vehicle (EV) market, at one point commanding over 70% market share. However, with new players entering the fray, competition is intensifying.
Balaji welcomed the competition, viewing it as essential for growing the overall EV market, which still stands at a modest 2.3% industry penetration. “The goal isn’t just to hold share against new EV players—it’s to grow EV adoption from 2.3% to 30%,” he said.
He reiterated Tata’s commitment to being a full-range EV provider, with models ranging from affordable EVs like Tiago and Punch to premium models like Harrier EV and Avinya.
Passenger Vehicle and Commercial Vehicle (PV & CV) Outlook
In the PV segment, Tata Motors acknowledged a slight dip in market share, largely due to gaps in the hatchback portfolio and sub-optimal after-sales service. However, relaunches like Altroz, the arrival of the new Curvv, and improvements in service are expected to reverse this trend.
On the CV side, despite a weak market leading to revenue declines, Tata Motors managed to improve profitability—something the company achieved for the first time in 25 years under such conditions.
Disclaimer:
The content of this article is based on the recent interview of Tata Motors CFO P.B. Balaji with ET Now and is intended for informational purposes only. The views and opinions expressed are those of the individuals involved and do not constitute financial advice or recommendations.
