Moneycontrol PRO
UPCOMING EVENT:Moneycontrol Pro & Espresso presents Nifty Banker 2.0 - India's First Retail Index Traders Online Conference. 12 Webinars at Early bird offer of just Rs.50/- per webinar exclusive for Moneycontrol Pro subscribers. Register now!

Tata Motors Q2 Results | Net loss widens YoY to Rs 4,442 crore

The performance of the company took a hit owing to lower volumes at its Jaguar Land Rover (JLR) business due to the COVID-induced global chip shortage that hit production.

November 01, 2021 / 06:16 PM IST
Revenue of domestic business for the quarter increased 90.7 percent to Rs 18.4K crore and pre-tax loss before exceptional items came in at Rs 819 crore compared to a loss of Rs 1,166 crore in the same period last year.

Revenue of domestic business for the quarter increased 90.7 percent to Rs 18.4K crore and pre-tax loss before exceptional items came in at Rs 819 crore compared to a loss of Rs 1,166 crore in the same period last year.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Tata Motors Limited on November 1 reported a consolidated loss of Rs 4,442 crore for the quarter ended September 30 (Q2FY22), against loss of Rs 314 crore reported in the same quarter last year. It had reported a loss of Rs 4,451 crore in the June quarter.

The consolidated revenue came in higher at Rs 61,379 crore, compared to Rs 53,530 crore in September 2020 quarter. Revenues in Q1FY22 stood at Rs 66,406 crore.

The performance of the company took a hit owing to lower volumes at its Jaguar Land Rover (JLR) business due to the COVID-induced global chip shortage that hit production.

Margins were under pressure due to high commodity prices.

JLR retails were down 18 percent year-on-year (YoY) to 92.7K units. The company’s India business continued robust growth and witnessed increase in both volume and average realisations for the period. The domestic volumes were up 77 percent to 162.4K units.

Close

JLR Business Performance

Commenting on the volumes of JLR business, the company said, “Wholesales to dealers in the quarter were 64,032 vehicles, down 12.8 percent YoY, and retail sales (including the China Joint Venture) were 92,710 vehicles, down 18.4 percent, reflecting the semiconductor shortage and lower retailer inventories.”

The JLR business witnessed a YoY decline in its retail sales in almost all its regions. North America was down -15.6 percent, China -6.3 percent, Europe -17 percent, and UK retail sales declined by -47.6 percent. Only the overseas region was able to buck the trend as it grew +10 percent.

Retail sales of all its models declined on a yearly basis except for the new Land Rover Defender, which retailed 16,725 vehicles, up 70.4 percent YoY, making it JLR’s bestselling model in the quarter.

“Despite the impact of the semiconductor shortage on production and sales, we continue to see strong demand for our products with global retail orders at record levels of more than 125,000 vehicles,” the company added.

Thierry Bollore, Jaguar Land Rover’s Chief Executive Officer, commented, “The global semi-conductor shortage remains challenging but I’m pleased to see the actions we have been implementing reduce the impact. With strong customer demand with a record order book, we are well placed to return to strong financial performance as semiconductor supply begins to improve.”

For the quarter, revenue for JLR came in at 3.9 billion pounds with a pre-tax loss of 302 million pounds (EBIT margin -4.7 percent). The free cash outflow for the business was 664 million pounds, 484 million pounds of investment spending, and 501 million pounds of volume-related working capital outflow. “This was significantly better than prior guidance for a 1 billion pounds free cash outflow, reflecting prioritised production of higher-margin products and cost controls to reduce the cash break-even point for the company,” it stated.

The business has strong liquidity of 5.9 billion pounds as of September 30, 2021, including 3.8 billion pounds of cash and a 2 billion pounds undrawn revolving credit facility.

Tata Motors (Standalone+Joint Ops) Business Performance

The company’s India business continues to perform strongly and witnessed an increase in both volume and average realisations for the quarter, however, the supply chain issues, and commodity inflation impacted the margins.

The domestic volumes were up 77 percent to 162.4K units. Commercial Vehicle (CV) volumes stood at 77.3K, up 102 percent y-o-y and the company’s market share in CV space is 44.6 percent.

Passenger Vehicle (PV) volumes were 85.2K, up 59 percent YoY. The market share for the company in this segment strengthened further with decade-high quarterly sales.

Tata Motors' Electric Vehicles (EV) business witnessed strong momentum and registered the highest quarterly sales of 2,704 units.

Revenue of domestic business for the quarter increased 90.7 percent to Rs 18.4K crore and pre-tax loss before exceptional items came in at Rs 819 crore compared to a loss of Rs 1,166 crore in the same period last year.

CV EBITDA margin stood at 3.1 percent, which is a decline by 10 bps YoY mainly due to commodity inflation despite improvement in volumes and mix. PV business reported an EBITDA margin at 5.2 percent, an improvement of 360 bps YoY.

“PBT improvement was mainly due to better volumes, improved product mix, offset by commodity inflation and fixed costs,” the company said.

The business has a strong liquidity position as of 30th September 2021 amounting to Rs 6.8K crore.

Commenting on the quarter gone by, Girish Wagh, Executive Director Tata Motors Ltd said, “At Tata Motors, we successfully ramped up production by prudently addressing supply-side challenges. During the quarter, we accelerated the sales momentum to increase market share in every segment of commercial vehicles, recorded a decade high sale in passenger vehicles, and delivered the highest ever quarterly sales in electric vehicles.”

"Looking ahead, we expect the demand for commercial, passenger, and electric vehicles to remain strong even as concerns about the supply of semiconductors and high input costs continue. We are taking definitive actions in the near term to mitigate these effects," Wagh added.

Commenting on the outlook for overall consolidated business, the company said, “Demand remains strong for JLR and India PV while CV demand is improving gradually. Semiconductor issues and commodity inflation will continue to impact the near term and we are doing our best to manage them. The performance is expected to improve gradually starting in H2 as both the supply chain and the pandemic situation improves.”

The stock closed at Rs 485.70 today, up Rs 2.0 from its previous day's close. The stock has seen a great run-up in the past one year and has risen 266 percent from its year-before levels. It has generated returns of 164 percent in this financial year, 65 percent in the past three months and 46 percent in the last one month.
Moneycontrol News
first published: Nov 1, 2021 04:50 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark