Auto manufacturer Tata Motors posted a massive loss of  ₹26,993 crore in the third quarter hurt by a one-time asset impairment charge of  ₹27,838 crore.

In an exchange filing on Thursday, Tata Motors said its luxury car unit, Jaguar Land Rover (JLR), took a hit due to “challenging market conditions particularly in China and inventory corrections.” The company, however, said it will continue to invest in “exciting products and leading edge technologies… Taking decisive actions to make the business Fit for Future by stepping up competitiveness, reducing costs and improving cash flows."

JLR is crucial for Tata Motors given that it contributes over 70% of the company’s total revenue and has been under pressure for a while now with a slowdown in China and uncertainty over Brexit causing sales to shrink in 2018.

The automobile giant had reported a quarterly profit of  ₹1,215 crore in the corresponding period last year.

Tata Motors said consolidated revenue grew 5% to ₹77,001 crore for the quarter ended December. On a standalone basis, Tata Motors’ revenue was up 1.5% year-on-year at  ₹16,208 crore, while profit after tax was  ₹618 crore.

N. Chandrasekaran, chairman, Tata Motors said in a statement “Tata Motors domestic business continues the strong momentum and has delivered market share gains as well as profitable growth. The Turnaround 2.0 strategy is delivering well with a continuing portfolio of product launches, which are the requisite building blocks for sustainable growth.”

He also said, “In JLR, the market conditions continue to be challenging particularly in China. The company has taken decisive steps to step up competitiveness, reduce the costs and improve the cash flows while continuing to invest in exciting products and leading edge technologies,” adding that he believes the company will be able to deliver strong results in the medium term.

Guenter Butschek, CEO and MD, Tata Motors called FY19 a “challenging period for the industry," adding that the company has been able to stay on track for growth on the back of new products, renewed brand positioning and aggressive cost reduction. “We are committed to our core objectives of winning decisively in CVs, sustainably in PVs and proactively in EVs. Our aspirations for the future will only grow to surpass customers’ expectations,” he said.

Tata Motors’ stock was up in trade on Thursday ahead of the results as the street was anticipating a recovery in JLR’s performance to boost profit. The stock closed up 2.64% on the BSE compared to the previous day’s close.

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