Tata Motors Ltd plans to “significantly bring down” its net automotive debt of ₹48,000 crore in the next three years, and has set a target for the TML Group to generate positive free cash flows from FY22 onwards, said Natarajan Chandrasekaran, Chairman. He was speaking at the company’s 75th annual general meeting held virtually on Tuesday.
“We currently have a net automotive debt ₹48,000 crore and we are deleveraging this business substantially. We have set a target that TML Group will significantly bring down the debt in the next three years. Towards this, we have already taken steps and have a target for TML Group to generate positive free cash flows from FY22 onwards. Overall investments of the group have reduced by 50 per cent during this fiscal year, and we will continue to manage this tightly going forward. The TML Group will also look to unlock non-core investments,” said Chandrasekaran.
The company is also looking at sharpening its product portfolio in its subsidiary Jaguar Land Rover (JLR), and will continue to invest in “new disruptive areas like autonomous and connected vehicles,” he said.
It is also investing in its “sales and service experience”, he said. “Customer behaviour is changing in many ways, further accelerated by Covid-19. This is fundamental — from consumers demanding more integrated digital experiences to prioritising health and safety features across purchasing decisions. TML and JLR endeavour to lead in this space by harnessing digital technologies. To advance this journey, TML will leverage the full range of capabilities of the Tata Group,” he added.
EV products
“We are committed to the EV revolution in India and we will continue to expand our product as well as ecosystem footprint, Chandrasekaran further said.
Speaking about the challenges faced by the automotive industry in the past year, he noted that domestic auto sales declined 18 per cent in FY20, the lowest print since the data series was introduced in 2001.
“Alongside a broad economic slowdown, regulatory changes — including changed axle load norms and the migration to BS-VI emission standards — fuelled uncertainty for both consumers and suppliers. These challenges were further exacerbated in the final quarter of the year by the country’s strict lockdown measures in response to the pandemic,” he said.
Tata Motors’ turnaround journey was interrupted in FY20 as demand deteriorated sharply, he said. TML’s consolidated revenues stood at ₹2,61,038 crore with a PBT loss of ₹10,580 crore.
Ongoing trade conflicts and the pandemic adversely impacted JLR vehicle sales in FY20, which contracted by 12 per cent year-on-year, he said. “JLR undertook a host of structural initiatives to drive efficiencies so that, despite the decrease in volumes, the business improved its profitability during the year and reduced its cash outflows, compared with previous years. Our turnaround programme in China resulted in six months of continued double-digit year-on-year growth,” he said.