Tata Motors Limited on May 12 reported a consolidated net loss of Rs 1,032 crore for the quarter ended March as against a consolidated net loss of Rs 7,605 crore in the year-ago quarter.
The company reported an 11.5 percent year-on-year decline in consolidated revenue from operations to Rs 78,439 crore for the reported quarter.
Analysts had expected the company to report a consolidated net profit of Rs 12.8 crore on revenues of Rs 82,386 crore.
The weakness in the performance of the company was largely down to subsidiary Jaguar Land Rover, whose revenues in the reported quarter nosedived 27.1 per cent year-on-year to 4.8 billion pound sterling.
The weakness in the revenues of JLR was down to the company's inability to secure semi-conductors to ramp up production while disruption in the European and China business also weighed.
"The environment remains difficult in light of the global chip shortage and other challenges. However, I’m encouraged by the continuing strong customer demand for our products, highlighted by a record order book," Thierry Bollore, chief executive officer of JLR said in an earnings statement.
JLR said that the semi-conductor shortage will continue through out 2022 even though there might be some improvement.
"However, the Covid lockdowns in China as well as the new Range Rover Sport model changeover are expected to limit volume improvements in Q1 possibly resulting in negative EBIT and negative free cash flows in the quarter," JLR said.
That said, JLR reported 340 million pound sterling in free cash flow in the March quarter and 1.2 billion pounds for the full financial year. JLR also took an exceptional charge of 43 million pounds on its business in Russia, which was affected by the Russia-Ukraine war.
Operating performance of JLR suffered in light of higher costs as operating margin shrank 270 basis points on-year to 12.6 percent in the reported quarter.
At the same time, the India business of the company continued to perform well as revenues in the commercial vehicle segment jumped 29.3 percent and in the passenger vehicle vertical rose 62 percent on-year.
"The Indian Commercial Vehicles sector, deeply impacted for two successive years, showed promising signs of growth in FY22 supported by a steady recovery in the economy, rising industrial activity and reopening of markets," said Girish Wagh, executive director at Tata Motors.
In passenger vehicles, the company will continue to drive strong sales performance whilst improving profitability and managing supply bottlenecks. In electric vehicles, the business will drive up penetration and accelerate sales further, Tata Motors said.
That said, the operating performance of the CV business was impacted by higher fuel and commodity costs for the company. The operating margin of the CV business shrank 290 basis points on-year to 5.9 percent in the reported quarter.
However, price hikes in the passenger vehicle segment helped that vertical to expand its operating margin by 190 basis points on-year to 6.9 percent.
"We remain agile and will continue to take prudent actions while enhancing our focus on future-fit initiatives of transforming customer experience digitally and strengthening our established lead in sustainable mobility,” said Shailesh Chandra, managing director at Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.
On May 12, shares of Tata Motors ended 3.8 percent lower at Rs 373.4 on the National Stock Exchange.