Tata Motors, the owner of the luxury carmaker Jaguar Land Rover, has posted a consolidated loss of Rs 9,894.25 crore for the quarter ended March 2020, as lockdowns across the world to control the spread of coronavirus hit revenue and operating performance.
The consolidated profit for the March quarter FY19 was at Rs 1,117.5 crore and Rs 1,738.3 crore in Q3FY20.
Jaguar Land Rover, which provides maximum support to Tata Motors' earnings, reported loss of 501 million pound at PBT level for the quarter, while at standalone level (India business), the company reported a loss of Rs 4,871 crore for the quarter. The company had reported a profit of Rs 106 crore in the same period last year.
"In India, demand which was already adversely impacted by the general economic slowdown, liquidity stress and stock corrections due to BS-VI transition, was further affected by the lockdown. Steep volume decline, particularly MHCV, and resulting negative operating leverage impacted profitability and cash flows," the Tata Group firm said in its BSE filing.
Consolidated revenue from operations for the quarter stood at Rs 62,492.96 crore, registering a 27.7 percent year-on-year decline, as standalone business fell 48 percent to Rs 9,733 crore and JLR's revenue declined 24 percent to 5,426 million pounds during the quarter YoY.
The standalone (including passenger vehicles, commercial vehicles, etc) and Jaguar Land Rover's sales volumes fell more than 30 percent YoY.
Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) margin contracted 510 bps YoY to 4.6 percent, while JLR margin fell 500 bps to 4.8 percent and Tata Motors standalone margin plunged 1,250 bps to 5.5 percent for the quarter ended March 2020.
"After Jaguar Land Rover's return to profit in the second and third quarters, which reflected improvements achieved through its transformation programme, the fourth quarter results were significantly impacted by the pandemic. Despite this, the business has improved its EBIT by 60bps and cash delivery by 560 million over the previous year," Tata Motors said.
Tata Motors' full year (FY20) loss stood at Rs 12,071 crore against a loss of Rs 28,826.23 crore the previous year. Standalone loss for the year was at Rs 7,289.63 crore (against a profit of Rs 2,021 crore YoY) and JLR posted a loss before tax at 422 million pounds during the year.
Consolidated revenue in FY20 declined 14 percent to Rs 2,61,068 crore compared to the previous year, with a 5 percent fall in JLR business and 37 percent drop in standalone.
"Q1 FY21 is expected to be significantly weaker in both JLR and Tata Motors, with the full impact of lockdowns being reflected in the results," Tata Motors said.
"A gradual improvement in performance is anticipated in the coming quarters as we deliver our exciting product range while driving a robust cost and cash-savings agenda. Actions are underway to significantly deleverage the Tata Motors Group, with JLR to become sustainably cash positive from FY22 while becoming future-ready," it added.
The company's JLR Project Charge has delivered cumulative savings of 3.5 billion pounds. Now it has increased its target for March 2021 to 5.0 billion pounds.
Finance costs during the year increased by Rs 1,485 crore to Rs 7,243 crore due to higher gross borrowings compared to FY19, said the company.
The company said free cash flow (automotive) in the year was negative Rs 9,200 crore (as compared to negative Rs 9,200 crore in FY19), reflecting lower profitability and adverse working capital primarily in India business.
The stock has lost 43 percent of its value year-to-date and corrected 62 percent in the March quarter itself.
Earlier this month, Tata Motors said it resumed operations at all plants and FIAPL JV plat at Ranjangaon also restarted work.
On the JLR front, "the company’s joint-venture plant in Changshu (China) has been operational since March as vehicle sales recover there and customers return to showrooms following the easing of the lockdown, while we are gradually resuming production at the Solihull and engine plants in the UK, the Slovakia plant, and contract assembly line in Austria", it added.
As of March 2020, Tata Motors has cash and cash equivalent of Rs 4,700 crore and the undrawn credit facility of Rs 1,500 crore. To shore up liquidity, the company said it issued commercial papers of Rs 3,500 crore and also raised Rs 1,000 crore through NCDs.JLR has a strong liquidity position of 5.6 billion pounds with 3.7 billion pounds in cash, financial deposits and 1.9 billion pounds undrawn credit facility as of March 2020, said the company. The company was continuously been shoring up liquidity and raised 220 million pounds through local funding and working capital facilities.