Group Report :

Tata Motors

Overview – SWOT – Strategies –

Recent Events – Financial Indicators

Publication date: June 2023

Analyst: Jordan Melic and Olivier Lemesle

Report code: 23XENT54

XERFI 13-15 rue de Calais, 75009 Paris, France Tel. : +33 1 53 21 81 51 Fax : +33 1 42 81 42 14 E-mail : etudes@xerfi.com Website : www.xerfi.com (full catalogue)
 Table of Contents

1. Overview 3
1.1. Presentation 4
1.2. Segments 5
1.3. SWOT 6
2. Corporate Strategies and Recent Events 7
3. Financial Indicators 10
4. Statistical Appendix 14
5. Glossary 20

Group Report - Tata Motors - June 2023 2

 1. Overview

Group Report - Tata Motors - June 2023 3

1.1. Presentation

Tata Motors

Reporting segments
(% revenue share)

Jaguar Land Rover Tata and other brand vehicles Vehicle Financing
65.0% 33.7% 1.3%

Headquarters
Mumbai, India
• Tata Motors is the leading Indian car manufacturer by revenue. It markets
a diversified portfolio of passenger and commercial vehicles, either under
Key figures (FY ending 03/23) its fully-owned brands (Tata, Jaguar, Land Rover, Tata Daewoo) or through
international joint ventures (e.g. with Italy’s Fiat and Brazil’s Marcopolo).
Consolidated sales €41.1bn
(Annual growth) (+24.5%) • The Jaguar Land Rover (JLR) unit develops and markets premium and
luxury vehicles for the global market under the Jaguar and Land Rover
EBITDA €4.4bn brands. Tata Motors’ international footprint is primarily a reflection of JLR
(EBITDA margin) (10.6%) activities.
EBIT €1.5bn • The Tata and other brand vehicles division develops and markets
(EBIT margin) (3.6%) passenger and commercial vehicles as well as related components. It
primarily employs the namesake Tata brand and its operations are
Net profit €0.3bn
(0.8%)
concentrated in India.
(net margin)
• The Vehicle Financing business provides vehicle financing solutions for
Employees 81,811 customers in India.

Group Report - Tata Motors - June 2023 4

1.2. Segments

% of sales Annual change

Segments Description
(FY ending 03/23) (%)

• Of the division’s two brands, Land Rover is

significantly larger by unit sales (86.7% vs 13.3%
Jaguar Land during last FY)
65.0% 18.9%
Rover (JLR) • Vehicles with electrified powertrains (mild hybrid,
PHEV and BEV) constituted 67% of the JLR vehicle
portfolio at the end of the last FY.

• Two operating units:

- Tata Commercial Vehicles (CV)
- 60.2% of division revenue during last FY,
32.5% y-o-y revenue growth
Tata and other brand
33.7% 38.1% - 43.9% of division unit sales
vehicles
- Tata Passenger Vehicles (PV)
- 39.8% of division revenue during last FY,
47.9% y-o-y revenue growth
- 56.1% of division unit sales

• Provides financing services to customers in India

through independent dealers as well as the Tata
Vehicle Financing 1.3% 2.5% Motors branch network
• Operates primarily through wholly-owned subsidiary
TMF Holdings Ltd.

Group Report - Tata Motors - June 2023 5

1.3. SWOT

A more competitive vehicle product mix is driving Tata’s improvement

SWOT analysis of Tata Motors

Strengths
• A leading player in one of the fastest growing and largest car
markets in the world, India
• Group’s position as part of the larger Tata business empire
generates synergies and softens competitive pressures
• Both JLR and TML enjoy strong government support
• Broad geographical presence (thanks primarily to JLR)
• Rapidly growing EV portfolio and capabilities
Weaknesses
• Heavy revenue dependence on JLR (65.0% of 2022 revenues)
• Falling Jaguar sales since 2018 (-19.2% y-o-y unit sales in 2022)
• Dogged by poor financial performances - negative average EBIT
over the last six years
• Heavily impacted by semiconductor shortages
• Playing catch-up to develop and establish EV portfolio
• No in-house battery production capacities to drive EV push

Opportunities Threats
• Rising urbanisation and the emergence of a global middle class • Very strong industry competition to gain EV market share
will sustain healthy vehicle demand • JLR brand position pits it against segment giants such as BMW
• Low-cost offering and geographic location provide favourable and Mercedes and makes differentiation more challenging
access to fast-growing emerging markets (ASEAN, India, etc.) • Concentration of high-end manufacturing capabilities in the UK
• Electrification trend in auto industry opens new growth • Supply chain and production impacts due to weak
channels (powertrain development, charging infra., etc.) macroeconomic environment and geopolitical tensions

Source: Xerfi Global with Tata Motors and business press

Group Report - Tata Motors - June 2023 6

 2. Corporate Strategies
and Recent Events

Group Report - Tata Motors - June 2023 7

2. Corporate Strategies and Recent Events

Corporate strategies Description

Tata’s status as a key player in the global car market is built fundamentally on its JLR portfolio and
the iconic Jaguar and Land Rover luxury brands. 65% of Tata Motors revenue was generated by JLR
during the last FY. The division is currently pursuing the Reimagine strategy, which aims to create a
new basis for growth in the autonomous and electrified vehicle market of the future.
JLR has pledged to invest £15 billion (€17.5bn) in electrification and digital activities over the next
five years. Raising production capacity for EVs will be a major focus, with the group’s Halewood
factory to be converted to all-electric production. While JLR will retain the flexible MLA architecture
that can be fitted with ICE, hybrid and BEV options, its next-generation medium-size SUV
architecture, EMA, will be fully electric.
In June 2023, JLR reinvented its corporate identity, replacing Jaguar Land Rover with only the
Accelerate roll-out of initials JLR. The move reflects the House of Brands approach adopted by the unit for its vehicle
electrified and portfolio development strategy. JLR will now have four main car brands: Range Rover, Defender,
autonomous technologies Discovery and Jaguar. Land Rover will be retained as a heritage asset but will no longer feature on
at JLR cars. The Jaguar brand, which has been through various difficulties in recent years, will be
reinvented as an all-electric line-up from 2025. The first BEV Range Rover will be available for pre-
order at the end of 2023, with delivery scheduled for 2024.

Date Recent events

JLR announces the creation of three new tech hubs in Europe, in Germany, Spain
and Italy. This represents an expansion to the unit’s partnership with computing
February giant NVIDIA. The new hubs will focus on the development of driver-assistance
2023 systems and AI-powered self-driving capabilities. The move brings the number of
tech hubs operated by JLR up to nine, adding to existing facilities in China, India,
the USA, the UK, Ireland and Hungary.

Group Report - Tata Motors - June 2023 8

 2. Corporate Strategies and Recent Events

Corporate strategies Description

The New Forever product range, launched in 2020, is a key strategic lever for Tata Motors,
particularly in its domestic Indian market. New Forever vehicles are positioned as aspirational
products that capitalise on the latest consumer demand trends around safety, styling and
technology. The aspirational focus allows the group to pursue higher margin growth.
During the last FY, Tata’s share of the domestic Indian Passenger Car segment rose 0.6pp compared
Drive Indian consumer
to the previous year to 10.4%, driven by strong demand for the Tigor, Altroz and Tiago models. The
demand with aspirational
Utility Vehicle segment saw even stronger growth figures, increasing its market share by 2.6pp
positioning
year-on-year on the back of the popularity of the Nexon, Harrier and Punch models.
Tata aims to drive sustained consumer demand for its passenger vehicle portfolio through the
continued introduction of new models and variants to its New Forever range. In January 2023, the
group unveiled the new Curvv SUV model, to be launched in 2024, as well as new Punch CNG and
Altroz Racer variants.
To meet rising market demand and keep manufacturing costs down, production debottlenecking is
a major group focus. Tata has raised its Indian production capacity three-fold in the past three
years. In January 2023, the group completed the acquisition of Ford India’s Sanand facility. The
Debottleneck Indian
factory is adjacent to an exisiting Tata complex, thereby generating various operational synergies,
production
and possesses advanced manufacturing assets. The additional production capacity of 300,000
vehicle units per year, scalable to 420,000, will bring the group’s total production capacity in India
up to 1 million units per annum.

Recent events
Tata launches the new iCNG (compressed natural gas) Altroz hatchback. This iCNG iteration follows similar
May
variants for the Tiago and Tigor models. The car is aimed at a younger generation of car owners and
2023
features a voice-controlled sunroof and wireless charging capabilities.

Group Report - Tata Motors - June 2023 9

 3. Financial Indicators

Group Report - Tata Motors - June 2023 10

 3. Financial Indicators

Consolidated net revenues Consolidated operating income (EBIT) and margin

unit: million euros units: million euros, % ratio operating income/sales

Net revenue EBIT EBIT margin

50 000 4 000 6%
41 139 3 000 4%
40 000 34 455 35 778 1 714 1 495
33 054 2 000 2%
31 004 29 658
30 000 1 000 201 0%
0 -2%
20 000 -1 000 -4%
-579 -488
-2 000 -6%
10 000
-3 000 -8%
0 -4 000 -3 201 -10%
03/18 03/19 03/20 03/21 03/22 03/23 03/18 03/19 03/20 03/21 03/22 03/23

Net revenue and operating income performance Consolidated net profit and margin
unit : annual change in % units: million euros, % ratio net profit/net revenue

Revenue % change EBIT % change

Net profit Net margin
800% 4 000 4%
642,6%
3 000 2%
600%
2 000 0%
400% 790
1 000 337 -2%
200% 141,3% 0 -4%
81,9% 15,8% 11,4% 24,5%
3,8% -1 000 -6%
0%
-13,3% -4,3% -2 000 -1 350 -1 343 -8%
-200% -1 699
-3 000 -10%
-400% -286,8% -4 000 -12%
-3 491
03/19 03/20 03/21 03/22 03/23 03/18 03/19 03/20 03/21 03/22 03/23

Source: Tata Motors Ltd. Financial year ends 31 March.

Group Report - Tata Motors - June 2023 11

 3. Financial Indicators

Sales by segment* Sales performance by segment*

unit: percentage share of net revenue unit: annual change in %

Tata and other brand FY ending 03/23 FY ending 03/22

vehicle

33,7% JLR

Vehicle Financing
V. Fin.
1,3%
65,0%

Jaguar Land Rover Tata

-10% 0% 10% 20% 30% 40% 50% 60% 70% 80%

Sales by region Sales performance by region

unit : percentage share of net revenue Unit: annual change in %

FY ending 03/23 FY ending 03/22

India
15.5%
United States ROW
33,0%
China
Rest of Europe 13,0%
UK
United Kingdom RO Eur.

China 12,4% USA

15,1% India
Rest of the 11,0%
World -20% 0% 20% 40% 60% 80%

Source: Tata Motors Ltd. Financial year ends 31 March. *excludes Others

Group Report - Tata Motors - June 2023 12

 3. Financial Indicators

Profitability ratios Liquidity ratios

units: % ratio net profit/total equity; % ratio net profit/total assets units: current assets net of inventories/current liabilities; current assets/current liabilities

ROA ROE Quick ratio Current ratio

10% 1,2
0% 1,0
-10%
0,8
-20%
0,6
-30%
0,4
-40%
-50% 0,2

-60% 0,0
03/19 03/20 03/21 03/22 03/23 03/19 03/20 03/21 03/22 03/23

Solvency ratios Free cash flow and capital expenditure

units: total liabilities/total equity; EBIT/interest expenses units: million euros; % ratio capital expenditure/net revenue

Debt-to-equity (left scale) Interest coverage (right scale) FCF (left scale) Capex ratio (right scale)

8,0 10,0 4 000 14%

7,0 8,0 3 000 12%
6,0 6,0 2 000 10%
5,0 4,0
1 000 8%
4,0 2,0
0 6%
3,0 0,0
2,0 -2,0 -1 000 4%
1,0 -4,0 -2 000 2%
0,0 -6,0 -3 000 0%
03/19 03/20 03/21 03/22 03/23 03/19 03/20 03/21 03/22 03/23

Source: Tata Motors Ltd. Financial year ends 31 March.

Group Report - Tata Motors - June 2023 13

 4. Statistical Appendix

Group Report - Tata Motors - June 2023 14

 4. Statistical Appendix

Consolidated Consolidated
Consolidated net Annual % change Annual % change
Year operating operating (EBIT) Net income Net margin
revenue net revenue EBIT
income (EBIT) margin

03/19 35,778 3.8% -3,201 -286.8% -8.9% -3,491 -9.8%

03/20 31,004 -13.3% -579 81.9% -1.9% -1,350 -4.4%

03/21 29,658 -4.3% -488 15.8% -1.6% -1,699 -5.7%

03/22 33,054 11.4% 201 141.3% 0.6% -1,343 -4.1%

03/23 41,139 24.5% 1,495 642.6% 3.6% 337 0.8%

units: million euros; % change; operating income and net income as % of sales

Source: Tata Motors Ltd. Financial year ends 31 March.

Group Report - Tata Motors - June 2023 15

 4. Statistical Appendix

2022 sales 2021 sales 2021-2022 2020 sales 2020-2021

Segment* 2022 % share 2021 % share
(04/22-03/23) (04/21-03/22) change (04/20-03/21) change

Tata and other brand vehicle 13,741 33.7% 9,950 30.4% 38.1% 5,941 67.5%

Vehicle Financing 516 1.3% 503 1.5% 2.5% 500 0.7%

Jaguar Land Rover 26,484 65.0% 22,282 68.1% 18.9% 23,025 -3.2%

units: million euros; % share; % change

Source: Tata Motors Ltd. Financial year ends 31 March. *excludes Others

Group Report - Tata Motors - June 2023 16

 4. Statistical Appendix

2022 sales 2021 sales 2021-2022 2020 sales 2020-2021

Geographical segment 2022 % share 2021 % share
(04/22-03/23) (04/21-03/22) change (04/20-03/21) change

India 13,566 33.0% 9,593 29.0% 41.4% 5,949 61.2%

USA 6,223 15.1% 5,419 16.4% 14.8% 5,588 -3.0%

United Kingdom 4,505 11.0% 3,876 11.7% 16.2% 4,413 -12.2%

Rest of Europe 5,110 12.4% 3,970 12.0% 28.7% 4,177 -5.0%

China 5,330 13.0% 5,097 15.4% 4.6% 5,328 -4.3%

Rest of the World 6,405 15.5% 5,100 15.5% 25.6% 4,203 21.4%

units: million euros; % share; % change

Source: Tata Motors Ltd. Financial year ends 31 March.

Group Report - Tata Motors - June 2023 17

 4. Statistical Appendix

Interest
Total Total Interest
Year Total assets Debt ratio ROE ROA coverage
liabilities equity expenses
ratio

03/19 35,700 29,459 6,670 4.42 -52.3% -9.8% 688 -4.65

03/20 37,536 30,862 7,147 4.32 -18.9% -3.6% 867 -0.67

03/21 39,950 34,217 6,204 5.52 -27.4% -4.3% 966 -0.50

03/22 38,526 33,677 5,265 6.40 -25.5% -3.5% 1,115 0.18

03/23 39,169 33,440 5,729 5.84 5.9% 0.9% 1,224 1.22

units: million euros; ratio; percentage

Source: Tata Motors Ltd. Financial year ends 31 March.

Group Report - Tata Motors - June 2023 18

 4. Statistical Appendix

Current Current Quick Current Operating Capital Capex Free cash

Year
assets liabilities ratio ratio cash flow expenditure ratio flow

03/19 14,679 17,302 0.58 0.85 2,258 4,219 11.8% -1,962

03/20 14,292 16,701 0.59 0.86 3,183 3,550 11.4% -367

03/21 17,555 18,766 0.71 0.94 3,466 2,415 8.1% 1,051

03/22 17,563 17,896 0.75 0.98 1,707 1,813 5.5% -106

03/23 18,110 18,435 0.72 0.98 4,232 2,166 5.3% 2,067

units: million euros; ratio; percentage

Source: Tata Motors Ltd. Financial year ends 31 March.

Group Report - Tata Motors - June 2023 19

 5. Glossary

Group Report - Tata Motors - June 2023 20


ENGLISH
ITEM DEFINITION
Assets encompass all the economic resources owned by a company.
Assets They are commonly divided into short term (cash. trade receivables.
etc.) and long term assets.
CAGR Acronym for Compound Annual Growth Rate.
Short for "Capital Expenditure". an item of the cash-flow statement
used as a proxy for investment in property. plant and equipment (PPE).
Capex
Generally entails physical assets used to maintain or increase operation
capacities.
Capex ratio The percentage ratio between capital expenditures and net sales.
The current ratio is found by dividing current assets by current
Current ratio liabilities and indicates whether the company has enough resources to
pay its short term debt (12 months).
The ratio between total liabilities and total equity. reflecting the
Debt-to-equity
company’s relative amount of debt.
Free The cash that a company is able to generate after subtracting expenses
cash flow needed to maintain its asset base.
Gross profit is the result of the difference between total sales and the
Gross profit cost of making products or providing services. Payroll and interest
costs as well as taxes are not taken into account.
Expenses associated with the research and development process of
R&D expenditure creating new products or services; it is often used as a proxy for
innovation.
Interest coverage is calculated by dividing operating income by net
interest expenses and reflects the company's debt burden. i.e. its ability
Interest coverage
to pay interest on outstanding debt. The lower this ratio. the more the
company is burdened by interest expenses.
Liabilities encompass all obligations arising from a company's past
operations and which will result in an outflow of resources in the
Liabilities
future. Liabilities are divided into short term and long liabilities. and
represent the debt a company owes to its creditors.
Group Report - Tata Motors - June 2023
Glossaire
FRANÇAIS
INDICATEUR DÉFINITION
L'actif regroupe toutes les ressources économiques détenues par
Actif une entreprise. On distingue généralement actifs circulants
(trésorerie. créances. stocks) et actifs immobilisés.
TCAM Acronyme de Taux de Croissance Annuel Moyen.
Abréviation de "Capital Expenditure". un élément du tableau de
trésorerie mesurant l'investissement dans les immobilisations
CAPEX
corporelles. Il sert à évaluer l'effort consenti pour maintenir ou
développer les capacités de production.
Ratio CAPEX/CA Ratio entre dépenses d’investissement et chiffre d’affaires.
Le ratio de liquidité générale exprime le rapport entre actifs
Ratio de liquidité
circulants et passifs circulants et reflète la capacité de l’entreprise
générale
à couvrir sa dette de court terme (12 mois).
Ratio entre la dette totale et le total des actifs. Un ratio au-delà de
Ratio
80% est généralement perçu comme un niveau d’endettement
d’endettement
alarmant pour l’entreprise.
Cash flow
Le Free Cash Flow. ou Cash Flow disponible en français.
disponible / flux de
correspond à la trésorerie générée par une entreprise après
trésorerie
déduction des dotations aux immobilisations.
disponible
La marge brute correspond à la différence entre le chiffre d'affaires
et le coût de fabrication du produit ou de la fourniture de services.
Marge brute
Les salaires. les intérêts. les taxes. etc. n'entrent pas dans le calcul
de la marge brute.
Dépenses associées au processus de recherche et de
Dépenses
développement de nouveaux produits et de nouveaux services.
de R&D
C'est un indicateur de la capacité d'innovation d'une entreprise.
Ratio entre le résultat opérationnel (EBIT ou EBITDA) et les
Ratio de couverture dépenses nettes d’intérêt; reflète la charge de la dette pour
des intérêts l’entreprise (capacité à payer les intérêts annuels). Plus le ratio est
faible. plus l’entreprise est à risque de faire défaut.
Le passif comprend toutes les obligations contractées par une
entreprise dans l'exercice passé de ses activités et qui se
Passif matérialiseront par des décaissements à terme. Le passif peut être
courant ou non-courant et représente l'ensemble des créances
d'une entreprise.
21

ENGLISH
ITEM DEFINITION
Net debt is calculated by subtracting a company's cash from its total
Net debt
debt.
Net profit refers to a company's total earnings. It is the result of the
difference between net sales and all operating and non-operating
Net profit
expenses such as taxes. interests. depreciation and amortisation
expenditures.
EBITDA refers to the earnings generated by the normal business
EBITDA operations of a company. It is the result of the difference between sales
and total operating expenses before depreciation and amortization.
Operating profit refers to the earnings generated by the normal
Operating profit
business operations of a company and after depreciation and
(EBIT)
amortization but before interests and taxes.
Return on assets is calculated by dividing a company's net income by
Return on assets
its total assets. It measures the ability of the company to generate
(ROA)
profits from its assets.
Return on equity is calculated by dividing a company's net income by
Return on equity
its shareholder equity. It measures the ability of a company to generate
(ROE)
profits from its investment funds.
Earnings made from the sales of goods and services. excluding VAT
Sales and other taxes. Reflects. total volumes sold. selling prices. exchange
rates and product mixes.
The quick ratio is calculated by dividing current assets net from
Quick ratio inventories by current liabilities and measures the company’s
immediate capacity to repay its short term debt.
Working capital is the difference between currents assets and current
Working capital liabilities. When positive. working capitals means a company would
able to pay its short term debt.
Group Report - Tata Motors - June 2023
Glossaire
FRANÇAIS
INDICATEUR DÉFINITION
L'endettement net se calcule en déduisant le cash disponible
Endettement net
d'une entreprise du montant total de ses dettes.
Le résultat net est le bénéfice net d'une entreprise. Il correspond à
la différence entre le chiffre d'affaires et toutes les dépenses
Résultat net
opérationnelles et non-opérationnelles comme les impôts. les
intérêts. les charges de dépréciation et d'amortissement.
Le résultat opérationnel désigne le bénéfice généré par l’entreprise
grâce à l’exercice de ses activités traditionnelles. Il correspond au
Résultat
chiffre d’affaires duquel est déduit l’ensemble des charges
opérationnel
opérationnelles (courantes et non courantes) sauf les
dépréciations et amortissements.
Le résultat d’exploitation correspond au résultat opérationnel
Résultat
après déduction des dépréciations et amortissements, et avant le
d’exploitation
résultat financier et les impôts sur les bénéfices.
Retour sur actif / Le retour sur actif est calculé en divisant le résultat net d'une
rendement de entreprise par le total de son actif. Il mesure la capacité d'une
l’actif entreprise à créer de la richesse à partir de ce dont elle dispose.
Retour sur fonds Le retour sur fonds propre est calculé en divisant le résultat net
propres / d'une entreprise par le total de ses fonds propres. Il mesure la
rendement des capacité d'une entreprise à créer de la richesse à partir des
capitaux propres capitaux apportés par ses actionnaires.
Le chiffre d'affaires correspond au total des ventes hors taxes de
biens et de services. Il est le reflet des volumes écoulés. mais aussi
Chiffre d'affaires
du prix de vente moyen. des taux de change et des variations du
mix produit.
Le quick ratio équivaut au rapport entre actifs circulant (diminués
Ratio de liquidité des stocks) et passifs circulants. Similaire au ratio de liquidité
immédiat générale. il exprime la capacité immédiate de l’entreprise à couvrir
sa dette de court terme.
Le fonds de roulement est la différence avec l'actif courant et le
Fonds de passif courant. Un fonds de roulement positif signale que
roulement l'entreprise pourrait honorer ses créances à court terme avec ses
actifs à court terme.
22