Tata Motors Lost Rs 11 Crore Per Day In Last 90 Days; Revenues Reduced By 11.5% YoY (Find Out Why?

On May 12, Tata Motors Limited reported a consolidated net loss of Rs 1,032 crore for the quarter ended March. The same was Rs 7,605 crore in the year-ago quarter.

For the reported quarter, the company reported an 11.5 percent year-on-year decline in consolidated revenue from operations to Rs 78,439 crore.

A consolidated net profit of Rs 12.8 crore on revenues of Rs 82,386 crore was expected by the analysts from the company.

JLR At The Centre Of Dipped Revenues

The abysmal performance of the company was mainly due to the lacklustre performance of the subsidiary Jaguar Land Rover. Notably, the revenues of Jaguar Land Rover in the reported quarter nosedived 27.1 per cent year-on-year to 4.8 billion pound sterling.

The company was unable to secure the necessary semi-conductors to ramp up production while disruption in the European and China business also weighed and this resulted in the revenue fall of JLR.

Thierry Bollore, CEO of JLR said in an earnings statement that “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”.

Though there might be some improvement, JLR said that the semi-conductor shortage will continue throughout 2022.

JLR said that “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”.

For the full financial year, JLR reported 340 million pound sterling in free cash flow in the March quarter and 1.2 billion pounds. An exceptional charge of 43 million pounds on its business in Russia was taken by JLR, which was affected by the Russia Ukraine war.

It was in the light of higher costs, the operating performance of JLR suffered, as the operating margin shrank 270 basis points on-year to 12.6 percent in the reported quarter.

Indian Business Picking Up, Good Numbers

On the contrary, In India the business was good as the company’s revenues in the commercial vehicle segment jumped 29.3 percent and in the passenger vehicle vertical rose 62 percent on-year.

Girish Wagh, executive director at Tata Motors said that due to a steady recovery in the economy, rising industrial activity and reopening of markets, the Indian commercial vehicles sector which was deeply impacted for 2 years showed promising signs of growth in FY22.

Tata Motors said that when it comes to the passenger vehicles, the company shall continue to drive strong sales performance whilst improving profitability and managing supply bottlenecks. The company said that when it comes to the electric vehicles, the business will drive up penetration and accelerate sales further.

However, due to the higher fuel and commodity costs for the company, the operating performance of the CV business was impacted. 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.

Shailesh Chandra, managing director at Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility said that the company remains agile and shall continue to take prudent actions to enhance our focus on future-fit initiatives of transforming customer experience digitally and strengthening our established lead in sustainable mobility.

On May 12, shares of Tata Motors ended 3.8 percent lower at Rs 373.4 on the National Stock Exchange.