Tata Motors sees its India loss widen by nearly 22 times as sales fall to one for every five units a year earlier
- CEO hopes for recovery in commercial vehicle sales, along with the economy, by the end of the year.
- The demand for cars and trucks — which make up for a majority of Tata’s products— was already very weak before the pandemic and now, it is abysmally low.
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Consequently, the net loss (before one-time items) for the India unit widened nearly 22 times to ₹2,190 crore. “Even as we continue to address the challenges, we see some disruption due to the intermittent shutdowns and supply chain bottlenecks,” Guenter Butschek, CEO and MD, Tata Motors, said.
|Sales||April to June 2020||April to June 2019||Growth %|
The revenue from the luxury car maker Jaguar Land Rover (JLR), Tata Motors’ British subsidiary, was down over 44% and it is now even more crucial for Tata Motors’ fortunes. The operating loss from JLR widened 8% to £13.6 million. “In this context, we are committed to significantly deleveraging the business in the coming years and aim to generate positive free cash flows,” the company statement said.
The stock has seen a run up of over 49% since the end of March, as investors hoped that the pent up demand during the lockdown, especially from people who do not want to use public transport anymore, would support the revenue. However, those hopes have now come undone.
“We have witnessed some green shoots emerging in PV owing to some pent up demand pre COVID, and are hopeful for a full recovery of the CV industry by the end of the fiscal year, with a gradual pickup of demand, aligned to the economic recovery,” said Butschek.
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