Tata Motors registers biggest quarterly loss of Rs8,435 cr for Q1 FY21
03 August 2020
Tata Motors Ltd has reported its biggest quarterly loss during the quarter ended 30 June 2020 hit by the nationwide lockdown that resulted in production and retailer shutdowns for major part of the quarter and heavily impacted sales volumes.
Tata Motors reported a consolidated net loss of Rs8,438 crore ($1.13 billion) for the fiscal first quarter ended 30 June compared with a loss of Rs3,698 crore a year earlier. Total revenue from operations fell 48 percent to Rs31,983 crore in the quarter as its home market went into a lockdown due to the pandemic.
For Tata Motors Q1 of FY21 the only saving grace was the successful transition to BSVI and a sharp increase in personal vehicle market shares to 9.5 per cent with the `New Forever’ range. Negative operating leverage impacted the performance significantly. However, cash outflows were better than earlier expectations driven by the improvement initiatives which yielded Rs1020 crore of cash savings in the quarter, the company said.
Tata Motors’ mainstay Jaguar Land Rover (JLR) also reported a bigger quarterly loss, as the coronavirus crisis hammered sales in several of its key markets.
Jaguar land rover reported a net revenue decline of 44 per cent to £2.9 billion during the quarter. Earnings before interest and taxes was down 13.6 per cent while loss before tax stood at £ 413 million.
Retail sales were down 42 per cent to 74,100 units.
During the quarter JLR’s investments in products and technologies were lower by £247 million year-on-year at £548 million.
The Covid-19 pandemic has taken a heavy toll on automakers globally and piled pressure on Tata Motors, which was trying to improve JLR’s sales after reeling from weak demand and political uncertainty related to Brexits.
Sales at JLR, which accounts for most of the company’s revenue, fell over 42 per cent during the quarter and Tata Motors said outlook for the unit remains uncertain.
“For the rest of FY21, Jaguar Land Rover will continue to manage costs and investment spending rigorously,” the company said.
Earlier this week, the unit named ousted Renault boss Thierry Bollore as its next chief executive officer, with a mission to return the British carmaker to profit.
The company said it looks forward to a gradual pickup in demand and improvement in supply in the second half of fiscal 2021 as overall economic activity picks up.
Tata Motors said the outlook remained uncertain for the year with infections continuing to rise and intermittent lockdowns in many countries. However the company expects a gradual recovery of demand and supply in the coming months.