Tata Motors Q2 net loss narrows to ₹944.6 cr

Auto major Tata Motors was able to narrow its consolidated net loss to ₹944.6 crore in the July-September quarter (Q2 FY23) against ₹4,441.5 crore loss in the same period last year. The company's overall revenue in the quarter, however, surged 29.7% to ₹79,600 crore against ₹61,378.82 crore in the year-ago period.

Tata Motors' EBITDA was ₹7,700 crore in Q2 and the margin rose 130 bps to 9.7%. Tata Motors' all three main divisions -- JLR, Tata CV, Tata PV -- recorded growth in the quarter. Tata's British arm Jaguar Land Rover's (JLR) revenue grew 36% year-on-year to £5.3 billion in Q2 FY23, reflecting strong model mix and pricing, with wholesale volumes (excluding China JV) growing at 17.6% YoY to 75,307.

However, says Tata Motors, the wholesale increase was lower than planned, primarily due to a lower-than-expected supply of specialised chips from one supplier, which could not be readily re-sourced in the quarter. "The production ramp-up of New Range Rover and New Range Rover Sport improved with 13,537 units wholesaled in the quarter, up from 5,790 in Q1 and helped mitigate this," says Tata Motors.

In the case of Tata CV, sales grew 15% in Q2 FY22. For the India business, domestic wholesales were at 93,651 vehicles, up 19% YoY. Exports, however, saw a decline at 6,771 vehicles, lower by 22%, on the financial crisis in a few export markets.

"Domestic retails grew at a higher rate as compared to wholesales (+23% yoy). The margin improvement was aided by higher volumes, realisations, although impacted by residual commodity inflation and fx," the company said.

Tata Motors PV wholesales grew 69% to 1,42,755 in Q2 on strong festive demand and debottlenecking actions. Its EBIT margins improved by 200 bps YoY to 0.4% on higher volumes, mix and improved realisations. However, margin recovery was impacted due to residual commodity inflation and adverse fx, said Tata Motors.

In its outlook, Tata Motors said demand continues to remain strong, but will remain a key monitorable in wake of global uncertainties. "Improving chip supply and cooling commodity prices will aid revenue and margins recovery and hence aim to deliver strong improvements in EBIT and free cash flows in H2 FY23."

“Demand for passenger vehicles remained strong in Q2 FY23 fuelled by improving supply of semiconductors, festive season and new launches. Tata Motors scaled new highs with sales of 1,42,325 units during the quarter, recording a growth of ~70% versus Q2FY22 with SUV sales contributing a rich ~66% of the quarterly PV sales. In electric vehicles, the company posted record-making sales of 11,522 units in Q2FY23, registering a growth of 326% versus Q2 FY22," said Shailesh Chandra, MD, Tata Motors PV & Electric Mobility Ltd.

Thierry Bolloré, Jaguar Land Rover’s CEO, said the company delivered a stronger financial performance in the second quarter as production of “new Range Rover and Range Rover Sport” ramped up, thus improving revenue, margins and cash flow, despite continuing semiconductor constraints.

In another development, Tata Motors has notified the New York Stock Exchange (NYSE) its intent to voluntarily delist its American Depositary Shares (ADSs) after January 2023 and terminate its ADS program.

"Since the Company’s ADSs were issued in 2004, the Company has witnessed a considerable increase in liquidity and foreign shareholder participation in the equity stock markets in India. The Company has further considered the consistent drop in the number of ADSs outstanding as a percentage of its outstanding Ordinary Shares. Therefore, the rationale for ADS listing in the United States has significantly diminished," said the company.

Tata Motors stock closed 0.44% down at ₹433.1 on the NSE today.