Tata Motors, the country’s largest commercial vehicle maker, expects its goods, medium and heavy commercial vehicle business to grow by mid-to-high single digits in FY24, given that the overall industry volume (TIV) went up from 1,50,000 to 4,20,000 units in FY22-FY23. This is as the current upcycle sustains amid strong replacement buying and incremental demand to serve the growing infrastructure space. This is expected as India continues to be the fastest growing large economy in the world.
On its part, the company will continue to grow the volumes but not at the cost of profits and there is a strong focus on improving its margins by reducing costs and discounts.
This will help the company sustain its EBITDAM above 10 percent, claimed the company to investors recently. EBITDAM stands for Earnings before interest, taxes, depreciation, amortisation, rent, and management fees. EBITDAM is a useful metric for investors and analysts because it provides a more accurate picture of a company's profitability than net income.
"We will continue to drive our demand-pull strategy and meet customer preference through innovation, service quality, and thematic brand activation," the company said in its presentation. "We will aim for higher realisations and cost savings to secure double-digit EBITDA margins for FY23-24 and improve the performance across all business verticals." Girish Wagh, Executive Director, Tata Motors, said in his presentation that FY23 was a year of progression for the Indian CV industry, as it fully emerged from the shadows of two successive years of low volumes in FY19-20 and FY20-21.
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