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Tata Motors Q1 Results FY22-2023

28 July 2022

Tata Motors announced its financial results for the quarter ending 30th June 2022, after market close on 27th July 2022. The automobile manufacturing company declared a loss of Rs.5,006.60 crore in Q1 FY22. The loss has deepened by 12.48% YoY (year on year), from the loss of Rs. 4,450.92 crore the company reported in Q1 FY22. 

This was on account of an increase in the cost of materials consumed. Input cost increased 25.76% YoY to Rs. 46,923.71 crore in Q1 FY23 from Rs. 37,312.38 crore in Q1 FY22. Tata Motors also reported an increase in purchases of products for sale. Finance costs and product development/ engineering expenses too saw notable rise in the quarter. A loss of Rs. 767.78 crore on account of foreign exchange played a role in aiding the overall loss in the quarter. 

EBITDA of the company declined by 90 bps and stood at 7.4% in Q1 FY23. This was a 10.84% YoY decline from 8.4% and a 33.93% QoQ decline from 11.2%. EBIT improved marginally by +60 bps on a YoY basis and was reported at 0.7%. The Net Auto Debt stood at Rs. 60.7k crores as a result of an adverse working capital impact. 

The revenue from operations of Tata Motors, however, saw a marginal increase of 8.34% YoY to Rs. 71,934.66 crore in Q1 FY23 from Rs. 66,406.45 crore in Q1 FY22. However, the figure was down 8.51% QoQ (quarter on quarter) from Rs. 77,857.16 crore in Q4 FY22. 

On the segment performances front, Tata Commercial Vehicles business witnessed strong volume growth as compared to what it experienced in Q1 FY22, which was a Covid-impacted quarter for the company. In the India business, domestic wholesales came in at 95,895 vehicles this quarter under review, a jump of 124% YoY. This margin improvement was aided by higher volumes, realisations, and stable commodity prices. Exports were, however, at 5,218 vehicles, down by 22.6% YoY. This, the company attributed to financial crisis in few of its export markets. Tata Personal Vehicles business continued its strong momentum with wholesales at 130,351 vehicles, up 101.7% YoY.

Looking into the performance of Range Rover, semiconductor-related production constraints compounded for the company. There was a slower-than-expected production ramp-up of the New Range Rover and Range Rover Sport variants. Covid-19 lockdowns in China also impacted production and sales in the quarter. The revenue from the Jaguar and Land Rover segment was down 16.87% YoY to Rs. 43,056.30 crore in Q1 FY23.

The adverse financial performance of the company was reflected in its EPS, which stood at a negative Rs. 13.07. Despite this, the Tata Motors share closed in the green at Rs. 443.75 ahead of the result, up 0.59% from the previous day’s closing. 

Hits of Tata Motors Q1 Results 

  • EBIT improved marginally by +60 bps on a YoY basis and was reported at 0.7%.
  • Revenue from operations marginally increased by 8.34% YoY to Rs. 71,934.66 crore in Q1 FY23 from Rs. 66,406.45 crore in Q1 FY22.
  • Commercial vehicle domestic wholesales were at 95,895 vehicles, a jump of 124% YoY. 

Misses of Tata Motors Results 

  • Tata Motors declared a loss of Rs.5,006.60 crore in Q1 FY22, increasing by 12.48% YoY from a loss of Rs. 4,450.92 crore in Q1 FY22. 
  • EBITDA of the company declined by 90 bps and stood at 7.4% in Q1 FY23.
  • Net Auto Debt stood at Rs. 60.7k crores.
  • Commercial vehicle exports were down by 22.6% YoY.
  • EPS stood at a negative Rs. 13.07. 

Segment-wise revenue under Tata Motors Quarterly Results

  • Tata and other brands vehicles: This includes three sub-segments –
    • Commercial Vehicle: Revenue increased 107.16% YoY to Rs. 16,269.81 crore in Q1 FY23 from Rs. 7,853.76 crore in Q1 FY22. 
    • Passenger Vehicle: Revenue increased 122.49% YoY to Rs. 11,556.32 crore in Q1 FY23 from Rs. 5,194.17 crore in Q1 FY22.
    • Corporate/Unallocable: Revenue increased 208.70% YoY to Rs. 117.74 crore in Q1 FY23 from Rs. 38.14 crore in Q1 FY22.
  • Vehicle Financing: Revenue increased 3.57% YoY to Rs. 1,097.68 crore in Q1 FY23 from Rs. 1,059.85 crore in Q1 FY22.
  • Jaguar and Land Rover: Revenue decreased 16.87% YoY to Rs. 43,056.30 crore in Q1 FY23 from Rs. 51,795.37 crore in Q1 FY22.

What the management says about Tata Motors Results

Shailesh Chandra, Managing Director Tata Motors Passenger Vehicles Ltd & Tata Passenger Electric Mobility Limited said: Demand for passenger vehicles continued to stay strong in Q1 FY23 even as the supply side remained moderately impacted. Overcoming all challenges, Tata Motors consistently set new sales records every month in passenger vehicle to record the highest ever wholesales and production of ~130,000 vehicles, twice as compared to Q1FY22. 

Electric vehicle sales too scaled new peaks month-on-month to deliver over 440% growth in Q1 FY23 versus Q1 FY22. During the quarter, we presented two new, future oriented, sustainable mobility concepts- ‘Curvv’ and ‘AVINYA’ that will introduce India to new vehicle typographies and experiences. While the ‘Curvv’, will be launched first as an EV and thereafter with internal combustion engine, ‘AVINYA’ is our vision of a pure electric vehicle that offers unparalleled roominess and comfort; delivers wellness with a premium experience; and comes packed with new age technology. We also launched the Nexon EV Max in Q1 FY23 and are seeing a robust demand for this extension of India’s best-selling EV. 

Going forward, we expect the supply side, including that of critical electronic components to progressively improve. We continue to monitor the evolving demand and supply situation and will stay nimble to take necessary actions swiftly.” 

Other things to know

  • Tata Motors incorporated ‘TML Smart City Mobility Solutions Ltd’ for undertaking urban mass mobility business.
  • The order bank grew to a new record of 200,000 units.
  • The P/E ratio of Tata Motors stood at -13.78, as against the sector P/E ratio of 130.11.
  • The P/B ratio of Tata Motors stood at 3.23, as against the sector P/B ratio of 5.69.

To read the RA disclaimer, please click here
Research Analyst: Bavadharini KS

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