Tata Motors posts higher-than-expected net loss in Q1 at Rs 4,451 cr
27/07/2021
NEW DELHI, jul 26: Tata Motors' consolidated net loss narrowed both on sequential and year-on-year basis to Rs 4,451 crore, but it was higher than expected.
The Jaguar Land Rover (JLR) parent company reiterated that global chip shortages, uncertainty due to the spread of coronavirus variants and commodity inflation would impact business in the short term. The auto major had reported a loss of Rs 8,438 crore in the year-ago period (Q1FY21) and Rs 7,605 crore loss in the previous quarter (Q4FY21).
Analaysts had estimated the loss to be around Rs 2,000 crore. For instance, Emkay Global pegged the net loss at Rs 2,009.7 crore. The revenue from operations in the June quarter more than doubled to Rs 66,406 crore as against Rs 31,983 crore in the year-ago period.
The company's earnings before interest, depreciation and amortisation (EBITDA) came in at Rs 5,500 crore.
Commeting the business outlook going forward, Tata Motors said the demand remains strong for JLR and India PV while CV demand is showing gradual improvement. The company expects semiconductor issues, commodity inflation and pandemic uncertainty to have an impact in the short term. "We expect the performance to improve progressively from H2 as supply chain and pandemic situation improves. The business has demonstrated strong resilience in the face of adversity and its fundamentals are strong. We will remain agile to address these challenges and drive consistent, competitive and cash accretive growth over the medium to long term whilst deleveraging the business to near zero automotive debt by FY24," Tata Motors said in an exchange filing. “The successful implementation of a comprehensive Business Agility plan enabled us to manage lockdowns effectively and also deliver competitive growth as markets reopened. In the near term, we remain focused on fulfilling customer demands while driving all levers of the business to mitigate the unprecedented commodity inflation," Girish Wagh, Executive Director of Tata Motors said.
"Looking beyond the short-term challenges, we see significant opportunities to leverage the mega trends shaping the Indian automotive industry. We are working to transform the customer experience digitally and also strengthen our lead in sustainable mobility. We will continue to make the requisite investments to ensure a competitive product portfolio whilst driving down the cash break-evens of the business to deliver consistent, competitive and cash accretive growth over the medium to long term.”
JLR retail sales in the first quarter were 124,537 vehicles, up 68.1 per cent year-on-year. The company said shortage of semiconductor supplies constrained production resulting in a pre-tax loss with an EBIT margin of (0.9) per cent.
Ahead of the results, Tata Motors' scrip slipped 0.95 per cent to Rs 292.75 on NSE.
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