Tata Motors Q1 net loss narrows to ₹4,450 crore

Tata Motors Ltd. said its consolidated first quarter net loss narrowed to ₹4,450 crore compared with ₹8,443.98 crore in the year-earlier period. With semiconductor issue bogging production, the company’s Jaguar Land Rover (JLR) unit manufactured 30,000 less units than planned.

“Tata Motors has delivered a subdued operating performance with EBITDA margin coming in at 7.9% vs our estimate of 8.3%,” said Mitul Shah, head, research at Reliance Securities. He said his firm had estimated the company’s net loss at ₹2,580 crore due to tax payment of ₹1,740 crore.

Consolidated revenue more than doubled to ₹66,406 crore.

Retail sales at JLR rose 68% to 1,24,537 vehicles as customer offtake continued to recover from the impact of the pandemic. However shortage of semiconductor supplies constrained production resulting in a pre-tax loss of £110 million.

Sales were higher in all key regions and electric vehicles made up 66% of JLR’s retail sales in Q1.

Revenue was £5.0 billion in the first quarter, 73.7% higher than Q1 in the prior year, reflecting a 72.6% year-on-year growth in wholesales to 84,442 vehicles, however, this was 30,000 units lower than planned due to semiconductor supply constraints.

The cash outflow is after £571 million of investment spending and unfavourable working capital of £800 million related to the lower production.

Thierry Bolloré, CEO, JLR said “We remain encouraged by the sheer strength of the demand for our vehicles, and note the success of our electrified powertrain offering.”

The Indian operations of Tata Motors showed significant improvement as compared to Q1 a year ago, however the second COVID wave in India along with the supply issues, slowed down the growth momentum as compared to the previous quarter.

As a result the company reported pre-tax loss of ₹1,314 crore for Q1 FY22.

The passenger vehicle business continued its turnaround journey and achieved double-digit market share. “EV business continues to grow rapidly and delivered 5x revenue growth and highest quarterly sales at 1,715 units,” it said in a filing.

Its revenue increased 343.1% to ₹11,904 crore. It said the PBT improvement was mainly due to better volumes, improved product mix, offset by commodity inflation and fixed costs.

Girish Wagh, ED, Tata Motors Ltd., said “The successful implementation of a comprehensive Business Agility plan enabled us to manage lockdowns effectively and also deliver competitive growth as markets reopened.”

On the outlook, the company said demand remained strong for JLR and India PV while CV demand was showing gradual improvement. “In this dynamic business environment, we anticipate that semiconductor issues, commodity inflation and pandemic uncertainty will have an impact in the short term. We expect the performance to improve progressively from H2 as supply chain and pandemic situation improves,” it said in a filing.

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Printable version | Sep 26, 2021 6:07:17 AM |

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