Jaguar Land Rover Targets Net Zero Debt From Fiscal 2025
JLR is now planning to grow its product offering, riding on the back of Tata Motors' increasing profitability.
Tata Motors Ltd.'s Jaguar Land Rover aims to clock a revenue of £28 billion, or approximately Rs 2.9 lakh crore, by the financial year 2024 and reduce the net debt to zero by fiscal 2025.
The British luxury car brand expects net debt to fall below £1 billion by the next fiscal due to its resilience against global headwinds, including the shortage of chips, inflationary pressures, and geopolitical constraints, it said in the company's Investor's Day presentation.
In FY23, JLR struggled to expand its electric vehicle line due to a shortage of semiconductors and supply chain disruptions amid the Russia-Ukraine war. Yet, its net debt had reduced to £2.9 billion as compared with the previous fiscal's £3.1 billion. FY24 is expected to follow the trend.
Riding on the back of Tata Motors, JLR is now planning to grow its product offering in an attempt to improve profitability and lower debt.
JLR ended fiscal 2023 with a gross revenue of £7.1 billion, a 6.5% EBIT margin, and £815 million worth of free cash flow.
Currently, the Range Rover, Range Rover Sport, and Defender account for 76% of JLR's order bank.
The company is looking to improve the individual market share of each model spectrum by fiscal 2026. It has set targets to grow the share of high-profitability cars in the market, like the Range Rover, to 17% in fiscal 2026 from an existing 12%. Priorities for the expansion of medium-sized cars, like the Velar, and lower-profitability cars, like the Jaguar Sedan, have taken a backseat.
Expanding upon company profit and improved investments, JLR intends to spend £15 billion over the next five years while maintaining an annual investment target of £3 billion.
The company announced that it would be partnering with Agratas and Nvidia to reduce cell manufacturing costs for its electric vehicles.
