Tata Motors Q2 loss at Rs 314.5 crore, revenue down 18% but beats estimates

Tata Motors, the country's largest commercial vehicle maker and owner of luxury car brand Jaguar Land Rover, posted a consolidated loss of Rs 314.5 crore in the quarter ended September 30 but the figure was better than CNBC-TV18 poll estimate of Rs 1,290 crore loss.

The company had reported a loss of Rs 216.56 crore in the September quarter of 2019.

The company's consolidated revenue fell 18.2 percent year-on-year to Rs 53,530 crore in Q2FY21 due to decline in commercial vehicle and JLR volumes.

"Despite concerns around the risk of a second wave of infection in many countries and other geopolitical risks, we expect a gradual recovery of demand and supply in the coming months," Tata Motors said in a BSE filing.

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

The commercial vehicle (CV) sales declined 56 percent year-on-year to 38,300 units in Q2FY21, but passenger vehicle sales volumes increased 73 percent year-on-year to 53,500 units and the sequentially, too, witnessed significant rise, company said.

Revenue from passenger vehicle (PV) segment also increased 86.3 percent YoY, with the achievement of EBITDA breakeven in Q2.

"PV achieved EBITDA breakeven led by strong customer pull for its 'new forever' range. CV profitability improved sequentially but continues to be impacted by lower volumes and adverse mix on a YoY basis. Business generated strong positive free cash flows led by the cash savings initiatives which yielded Rs 1,500 crore in the quarter and Rs 2,500 crore year-to-date," company said.

The UK-based luxury car maker Jaguar Land Rover sold 1,13,600 units during the quarter ended September 2020, down 11.9 percent year-on-year due to COVID-19 but sequentially the same increased 53 percent.

"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 remain below pre-COVID levels a year ago," Tata Motors said.

JLR reported revenue at 4.4 billion pound, up 52.2 percent from Q1FY21, but down 28.5 percent from a year ago period.

It generated a 65 million pound profit before tax (PBT) in the second quarter up significantly from a loss of 413 million pound in the prior quarter but lower than the pre-COVID PBT of 156 million pound a year ago.

"The improvement in the year reflects the recovery in sales, 0.3 billion pound of project charge+ cost efficiencies and favourable foreign exchange impact. Margins improved from Q1 with EBITDA at 11.1 percent and EBIT at 0.3 percent," company said.

Tata Motors invested Rs 669 crore and JLR 531 million pound in products and technologies during the quarter, while both had reported positive cash flows of Rs 2,300 crore and 463 million pound respectively in the quarter.

"We look forward to a gradual pickup in demand and supply situation on the back of overall economic recovery expected in second half of FY21. The company will focus on conserving cash by rigorously managing cost and investment spends to protect liquidity," Tata Motors said.