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Mumbai-based automobile maker Tata Motors declared its first quarterly results for the financial year 2021-22. The company reported a consolidated net loss of Rs 4,451 crore on a year-on-year (y-o-y) basis. This however compares with a consolidated net loss of Rs 8,438 crore the company reported in the same quarter of the last year. 

The revenue of the company increased by 107.6% on a y-o-y basis to Rs 66,406 crore, but this was largely because of a low base in the year-ago quarter. The past year was marred by lockdowns imposed by the pandemic and the shutting down of several of its production units and dealerships across the globe.

Jaguar Land Rover, which is the cash-cow for Tata Motors saw its revenues increase by 73.7% y-o-y to 4.96 billion pound sterling with demand boosted by the reopening of markets in several developed economies like China, the US and Europe.

The shares of TATA Motors were reduced by 1% to Rs 292.75 on the NSE when the markets closed on the day. 

Hits

  • Jaguar Land Rover’s EBITDA saw an expansion of 540 basis points on a Y-o-Y basis to 9%
  • Retail sales of Jaguar rose by 68.1% on a Y-o-Y basis as the pandemic situation improved. The company reported a sale of 124,537 vehicles
  • India business for JLR rose by 343% on a y-o-y basis to Rs 11,904 crore in sales
  • The EBITDA margin of the India business increased by 3110 basis points to 1.8% y-o-y
  • The business of electric vehicles is seeing a 5x growth and the company reported a quarterly sales figure of 1715 units

Misses

  • Jaguar Land Rover suffered a pre-tax loss of 110 million pounds sterling during the quarter due to shortages of semiconductors
  • JLR incurred a cash outflow of close to 1 billion pound sterling in the reported quarter
  • Tata Motors missed analyst estimates by a large number that pegged the net loss at Rs 1,312 crore

What The Company Said

In the short term, the company is expecting the shortage of conductors, commodity price inflation and the uncertainty of the pandemic situation to impact its sales. But as the situation improves, the company sees its results improve too. The company expects to become zero-debt by the financial year 2024. It also expects the long-term prospects to improve as the pandemic eases and the demand for its cars to increase.

What’s In It For Investors?

Tata Motors is a brand in the automotive sector. Though the company reported a loss, the demand for its vehicles is steadily growing. Jaguar Land Rover continues to be the marquee brand for the company and retains its demand in the global market. JLR contributes about 80% of the company’s revenue.

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