Tata Motors on Monday reported a greater than expected loss in the first quarter with its Indian operations coping more effectively than overseas arm Jaguar Land Rover to the twin challenges of the pandemic and a semiconductor shortage.
The Indian auto major reported a consolidated loss of Rs 4,450.92 crore against a loss of Rs 8,437.99 crore in the year-ago period. While JLR was a drag, the performance of the domestic operations was better than estimates.
Analysts had expected the company to report a net loss of around Rs 2,000 crore during the period. In the preceding quarter, Tata Motors had posted a net loss of Rs 7,605.40 crore.
During the period, its consolidated revenues stood at Rs 65,535.38 crore, up from Rs 31,481.86 crore in the same period of the previous year. It was, however, lower than the Rs 87,772.31 crore earned in the January-March period.
Jaguar Land Rover (JLR), which contributes a significant part of Tata Motors’ topline, reported revenues of around £4.97 billion, which was a 73.7 per cent jump over the previous year.
Retail sales of JLR rose 68.1 per cent year-on-year to 124,537 units, while wholesales jumped 72.6 per cent to 84,442 vehicles. But the semiconductor constraint meant wholesales fell short of targets by around 30,000 vehicles.
According to JLR, the production constraint resulted in a pre-tax loss of £110 million compared with £413 million in the same period of the previous year. The company reported a free cash outflow of £996 million, which it said was better than £1.6 billion at the peak of the pandemic a year ago.
On the road ahead, the Tata Motors subsidiary said that despite the spread of the Delta variant, a higher vaccination coverage is an encouraging trend. However, it added that the shortage of semiconductors is very difficult to forecast.
The company reiterated that the semiconductor supply shortages in the quarter ending September 2021 will be greater than in the first quarter, potentially resulting in wholesale volumes coming in about 50 per cent lower than planned.
“JLR expects the situation will start to improve in the second half of the financial year. In the second quarter, JLR expects a negative EBIT margin with a free cash outflow of less than £1 billion.
“As the semiconductor supply improves, JLR expects to achieve a positive EBIT margin and positive free cash flow in the second half of the financial year,’’ it said.
Tata Motors’ standalone revenues, which largely represent its domestic & joint operations, came in at Rs 11,818.31 crore against Rs 2,634.14 crore in the year ago period — a 349 per cent rise. However, it posted a loss of Rs 1,320.74 crore, which was lower than Rs 2,190.64 crore in the same quarter of the previous year.
Tata Motors expects demand to improve but warned of rising input prices. The results should improve on a sequential basis from the second half, the company said.
