Tata Motors is seeing strong demand for its vehicles across businesses - Jaguar Land Rover, commercial vehicles (CVs) and passenger vehicles (PVs) despite ongoing geopolitical, supply and inflation concerns, Chairman N Chandrasekharan said in his speech to the shareholders at the automaker's 77th Annual General Meeting.
The past few years have been being unrelenting due to a persistent global epidemic, record-high inflation, an unpleasant military conflict, escalating geopolitical concerns, and supply chain difficulties, Chandrasekharan said.
Speaking about the financial performance of the company, Chandrasekaran said, "In FY22, our global wholesales increased by 20 percent to 10,86,734 vehicles and revenue stood at Rs 278,454 crore - 11.5 percent higher as compared to FY21. EBIT margin stood at 0.7 percent - 190 bps lower as compared to FY21 due to impact of commodity inflation and semiconductor shortages."
"Free cash flow (automotive) in the year, was negative at Rs 9,472 crore (as compared to positive Rs 5,317 crore in FY21), primarily due to adverse working capital. However, the business showed strong sequential recovery with positive free cash flow (automotive) of Rs. 11,916 crore in the second half of FY22," Chandrasekaran said at the AGM.
Chandrasekaran added that the semiconductor supply is generally improving, and commodity prices are levelling off. He expected company's performance to get better throughout the course of the year, and also stated that they view FY23's second half to be marginally stronger than the first.
Tata Motors Group is in the process of pivoting its underlying business model towards sustainable mobility. Jaguar Land Rover is targeting Net Zero emissions for the portfolio it sells by 2039, 2040 for PVs and 2045 for CVs.
While the overall industry volumes grew by 15 percent, the automaker's domestic business grew 49 percent by volumes and 11.5 percent by revenues. Despite the margins being impacted by supply chain issues and runaway commodity inflation, India business ended with strong free cash flows of Rs 1,879 crore, said Chandrasekaran.
The Passenger Vehicles segment was the star performer of the Indian business during the year. A shift to personal mobility over public transport and a rising preference for the company's ‘New Forever’ range of cars and SUVs, led to the PV business recording its highest-ever annual sales of 370,354 units and growing its market share to 67 percent over FY21.Preference for Tata Motors' ‘New Forever’ range of vehicles continued to rise and the company introduced over 25 new products and variants
to lead in the fastest growing market segments, said Chandrasekaran. The launch of India’s first sub-3 compact SUV “Punch” and CNG powered “Tiago” and “Tigor” added further zest to our vehicle mix to deliver incremental volumes.
The overall market share in PV increased to 12.1 percent (+390 bps vs FY21) touching 13.4 percent in Q4 FY22. Nexon is now consistently ranked as India’s No. 1 SUV and Punch consistently lists in the top 5 SUVs sold every month.
In Electric Vehicles, the automaker registered the highest ever annual EV sales of 19,105 units in FY22 (up 353 percent vs FY21) and our EV penetration in Q4 FY22 was 7.4 percent of our overall PV volumes.
Meanwhile, Tata Motors Finance business delivered a steady performance despite overall stressed market conditions and introduction of more stringent compliance norms. The Assets Under Management grew by Rs.2,410 crore to Rs.45,220 crore and it delivered a PBT of Rs.101 crore and a pre-tax ROE of 2.1 percent, the chairman added.
Commercial VehiclesN Chandrasekaran stated that CV sales reflect economic growth and the resurgence in overall economic activity resulted in CV volumes rising by 37 percent this year. He said amidst a challenging scenario, the CV business posted sequential quarter on quarter growth on the
back of improved consumer sentiment, buoyancy in e-commerce, firming freight rates and higher infrastructure demand.
He mentioned that their offerings of smart, future ready mobility solutions with the lowest TCO (Total Cost of Ownership) have been well received. It is stated that they have launched over 80 new products and 120 variants across segments, to cater to the evolving needs of seamless cargo and people transport across sub segments and applications.The Chairman further said Tata Motors has gained market share in every segment of CV in FY22 as compared to FY21 - M&HCV to 58.2 percent (+10 bps), ILCV to 49.0 percent (+310 bps), Buses and Vans to 44.8 percent (+420 bps) and turned around SCV to 39.1 percent (+160 bps), to record a consolidated 44.9 percent (+250 bps) market share.