Tata Motors loss widens to ₹307 crore in the second quarter — despite JLR returning to profit
Tata Motorsreported a consolidated net lossof ₹307.26 crore for the second quarter ended September 30.
- The overall revenue declined 18% year-on-year to ₹53,530 crore during the same period.
- Although the revenue from the luxury carmaker Jaguar Land Rover (JLR), Tata Motors’ British subsidiary, was down over 28.5%, it generated a £65 million profit before tax (PBT).
The company attributes the weakness in demand to the coronavirus induced lockdown and restrictions in activities post that. This is the first full quarter of operations after India eased the lockdown restrictions.
Tata Motors reported a consolidated net loss of ₹307.26 crore for the second quarter ended September 30. The loss was 38% higher compared to the same quarter last year. The overall revenue declined 18% year-on-year to ₹53,530 crore during the same period.
Advertisement“Lockdowns have impacted the company operationally including on supply chain matters. The company is monitoring the situation closely taking into account directives from the Governments,” Tata Motors said in its quarterly report.
“The PV segment has delivered stellar performance during the quarter and achieved EBITDA breakeven. CV margins improved sequentially but continue to be impacted by lower volumes and adverse mix on a y-o-y basis,” it added.
JLR returns to profitability
Despite the downturn in its domestic business, the company said its luxury car segment JLR returned to “profit with significant positive cash flow in the quarter”. Although the revenue from the luxury carmaker Jaguar Land Rover (JLR), Tata Motors’ British subsidiary, was down over 28.5%, it generated a £65 million profit before tax (PBT).
Thierry Bolloré, Jaguar Land Rover Chief Executive Officer said, “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 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.”
Positive outlook ahead
AdvertisementWith the arrival of the festive season, Tata Motors is also betting on a sharp rise in sales figures. Despite concerns around the risk of the second wave of infection in many countries and other geopolitical risks, the company said it looked forward to a gradual pickup in demand and supply situation on the back of overall economic recovery expected in the second half.
“In PV, we accelerated the momentum built in Q1FY21 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,” said Guenter Butschek, CEO and MD, Tata Motors.
Tata Motors remains committed to achieving near-zero net automotive debt in the coming years by “focusing on better front-end activations of our exciting product range and executing our cost and cash savings with rigour.”
AdvertisementTata Motors’ share price has seen a run-up of over 40% since the end of June.
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