Tata Motors reports Q3 net profit of Rs1,756 crore
30 January 2020
Tata Motors has reported a consolidated net profit of Rs1,755.88 crore for fiscal third quarter ended 31 December 2019 against a net loss of Rs26,960.8 crore during the October-December period of 2018-19.
On a standalone basis, the company posted a net loss of Rs1,039.51 crore against a profit of Rs617.62 crore in the year-ago quarter
Total revenue from operations stood at Rs71,676.07 crore during the October-December 2019-20 quarter compared with Rs76,915.94 crore in the year-ago quarter, Tata Motors said in a regulatory filing.
Standalone total revenue stood at Rs10,842.91 crore compared with Rs16,207.67 crore in the year-ago quarter.
During the third quarter, the company's standalone wholesale numbers, including exports, declined 24.6 per cent to 1,29,185 units.
Revenues of UK operations, Jaguar Land Rover, increased to 6.4 billion pounds, up 2.8 per cent year-on-year. The brand's total retail sales fell 2.3 per cent during the quarter compared to the similar quarter of the previous fiscal.
While Jaguar Land Rover has continued its turnaround, market decline and BS-VI stock reduction in domestic market has affected company's performance, Tata Motors said.
Jaguar Land Rover continued its turnaround and transformation journey with another quarter of strong delivery. The China market continued to improve gradually while Project Charge is well ahead of plans having already delivered 2.9 billion pounds so far, it said.
Despite the many challenges presently facing the industry, Jaguar Land Rover has continued to expect improved profitability and cash flow for the financial year ending 31 March 2020 with an EBIT margin of around 3 per cent. However, the developing situation with the coronavirus could have some impact on this.
“In the third quarter Jaguar Land Rover sustained year-on-year revenue and profit growth as we continued to transform our business. Conditions in the automotive industry remain challenging but we are encouraged by the recovery in our China business and the success of the new Range Rover Evoque. Our proactive and decisive actions are creating a more robust, resilient business, transforming today for tomorrow, Ralf Speth, JLR chief executive, commented.
“Our improving financial results and the cost and cash flow achievements of Project Charge will support the next phase of our pipeline of exciting new vehicles and technologies, with a choice of outstanding electrified, petrol and diesel powertrains. This combined success is enabling us to lay the foundations for long-term growth as we move purposefully towards Destination Zero – our mission to shape future mobility with zero emissions, zero accidents and zero congestion,” he added.
In India, the auto industry continues to be impacted by the general economic slowdown. The profitability was impacted by adverse mix where despite increasing market shares, M&HCV volumes declined, the company said.
"This coupled with proactive system stock reduction of Rs3,800 crore resulted in loss of operating leverage," it said.
"Though the near-term market situation is fluid, we are optimistic on the medium term as we launch our exciting BS-VI range of products with our system inventory at a multi-year low. We remain focused on driving our turnaround strategy and transitioning seamlessly to BS-VI," the company further said.
“The downturn in the automotive industry continued in Q3 as the economy slowed down. Despite gaining sequential market shares in M&HCV, ILCV and SCV this quarter, our financial performance was impacted due to the downturn coupled with the inventory corrections we took to get ready for BS VI. Our focus on retail acceleration and system stock reduction helped us achieve a multi-quarter low inventory level in CV and PV, while simultaneously getting ready for a smooth transition to BSVI. We have taken the BSVI transition not only as a mere compliance agenda, but, have gone beyond and provided exciting value enhancements packaged in a completely new product portfolio. We are confident that this approach will reap us rich rewards in the coming quarters,” Guenter Butschek, CEO and MD, Tata Motors, said.
As the sales upbeat of the festive months could not sustain, we remain concerned about the intrinsic demand and weak consumer sentiment. However, we expect a perceptible improvement in demand outlook as the infrastructure investments announced by the government pick up pace. We also anticipate further measures in the Union Budget to boost consumer sentiment and spur growth.
We remain optimistic of the medium to long term opportunity offered by the Indian automotive market and aim to win in this market with our fully refreshed, exciting and competitive portfolio coupled with focused efforts to improve our sales and customer experience and continued drive for cost efficiencies.”