Tata Motors reports consolidated Q2 net loss of Rs307 cr as Covid weighs

The company’s consolidated net revenue also decreased by 18 per cent year-on-year to Rs53,530 crore during Q2 FY21 compared to a net revenue of Rs65,432 crore during Q2 FY20.

Mumbai-based Tata Motors said on a standalone basis, wolesales (including exports) during Q2 FY21 increased 3.4 per cent to 109,958 units. Domestic volumes were down except for the passenger vehicle business which rose 110.4 per cent year-on-year.

Sales of medium and heavy commercial vehicles were down 43.2 per cent, while sales of light commercial vehicles were down 32.5 per cent, small commercial vehicles and pick-up sales were down 5.7 per cent and sales of buses were down 74.4 per cent. 

Despite concerns around risk of second wave of infection in many countries and other geopolitical risks, the company expects a gradual recovery of demand and supply in the coming months. 

Tata Motors said it is committed to achieving near zero net automotive debt in the coming years by focusing on better front-end activations of its exciting product range and executing cost and cash savings with rigour.

“The auto industry continued its calibrated progress in Q2 FY2021 as the nationwide lockdown eased further. With health, safety and wellbeing of our employees and the supporting ecosystem at the forefront, we scaled up capacity while prudently addressing supply chain bottlenecks. In PV, we accelerated the momentum built in Q1 FY2021 and saw demand gradually emerge in select segments of CV. We remain hopeful for a full recovery in the CV industry by the end of this fiscal year aligned to the overall improvement in the economy,” Guenter Butschek, CEO and MD of Tata Motors, said.

Tata Motors’ UK business Jaguar Land Rover returned to profit with significant positive cash flow in the quarter as sales and revenue recovered from the impact of Covid-19 in Fiscal Q1 but remained below pre-Covid levels a year ago. Retail sales were up 53.3 per cent year-on-year at 113,569 units during Q2 FY21 with almost all retailers now open. 

China sales were particularly encouraging, up 14.6 per cent on the prior quarter and 3.7 per cent YoY.

Revenue was 4.4 billion pound (Rs39,859 crore) (on wholesales of 73,451 excluding China JV), up 52.2 per cent from Q1 FY2021, although down 28.5 per cent from pre-Covid levels a year ago. Jaguar Land Rover generated profit before tax (PBT) of 65 million pound (Rs589 crore) in the fiscal second quarter, compared to a loss of 413 million pound (Rs3,741 crore) in the prior quarter but lower than the pre-Covid PBT of 156 million pound (Rs1,413 crore) a year ago. 

The improvement in the year reflects the recovery in sales, 0.3 billion (Rs2,717 crore) of project charge+ cost efficiencies and favourable foreign exchange impact. Margins improved from Q1 with EBITDA at 11.1 per cent and EBIT at 0.3 per cent.

“Although Jaguar Land Rover is not immune to the headwinds impacting the global automotive industry, it has the foundations in place to generate long-term sustainable profitability. I have been encouraged by the strengths of the company – reflected by its brand appeal and the capabilities of its employees – that will enable it to seize new opportunities in a rapidly-changing industry. I am confident these qualities and a strong product strategy with a focus on financial discipline will equip Jaguar Land Rover to address challenges in the period ahead,” Thierry Bollore, who took over as Jaguar Land Rover CEO in September, said.

Looking ahead, Tata Motors expects a gradual improvement in sales supported by new and refreshed products, including the short wheel-base Land Rover Defender 90, the refreshed Jaguar F-PACE as well as 2021 model year Range Rover Velar, Jaguar XF and Jaguar XE. Jaguar Land Rover also continues to expand its offering of electrification across its model range. Of the 13 nameplates in the company’s product portfolio, seven have now been revealed with plug-in hybrids and nine with mild-hybrids, in addition to the full battery electric Jaguar I-PACE. One more PHEV and two more MHEVs are expected to be launched later this fiscal.