Tata Motors Loss Swells in September Quarter on Commercial Vehicle Decline
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The company said its revenue in the six months ended September 30 had been impacted as the group’s manufacturing plants and offices had to be closed down for a considerable period of time due to the Covid-19 pandemic. “Lockdowns have impacted the company operationally including on supply chain matters. The company is monitoring the situation closely taking into account directives from the governments. Further, the Reserve Bank of India (RBI) has announced moratorium on loan repayments for specific borrower segments, which impacts Group’s vehicle financing business in India,” Tata Motors said. “Management believes that it has taken into account all the possible impacts of known events arising from Covid-19 pandemic in the preparation of the financial results, including but not limited to its assessment of Group's liquidity and going concern, recoverable values of its property, plant and equipment, intangible assets, intangible assets under development, allowance for losses for finance receivables and the net realizable values of other assets,” it added.
The auto major said its Jaguar Land Rover (JLR) unit returned to profit with significant positive cash flow in the quarter as sales and revenue recovered from the impact of Covid-19 in fiscal Q1, but remain below the pre-Covid levels from a year ago. “As we look ahead, we see demand gradually improving. In the case of JLR, we see demand picking up in all the geography we operate under and we expect continued performance improvement in JLR as the quarter and year progress. At Tata Motors, we see passenger vehicles gradually returning back to growth, and we are also seeing an increase in market share as the supply chain issues start sorting out. Overall, we expect the second half of the year to be even stronger compared to the first half of the year,” stated P B
The company said its revenue in the six months ended September 30 had been impacted as the group’s manufacturing plants and offices had to be closed down for a considerable period of time due to the Covid-19 pandemic
Balaji.
The company's total revenue from operations declined to Rs. 53,530 crore in the second quarter as against Rs. 65,431.95 crore during the same period last fiscal, Tata Motors said. On a standalone basis, the company posted a net loss of Rs. 1,212.45 crore for the September quarter. It had registered a net loss of Rs. 1,281.97 crore in the same period last fiscal. The total revenue from operations stood at Rs. 9,668.10 crore as compared to Rs. 10,000.48 crore in the September quarter of 2019-20. JLR reported a revenue of 4.4 billion pound, up 52.2 percent from April-June quarter this fiscal, although it is 28.5 percent lower compared to the same period a year ago. The luxury brand generated a 65 million pound profit before tax in the second quarter, compared to a loss of 413 million pound in the prior quarter. The PBT stood at 156 million pound a year ago.
P B Balaji said JLR in China was back to growth as far as this quarter is concerned and the company continues to see things improving on the ground there and in the rest of the world. “In the UK, we have almost flat growth in this quarter and then we see the USA, and Canada coming through, and now Europe has also started to lift,” he said, adding that the concerns are in those countries where COVID situation is in various stages.
On the concerns around the second wave of COVID-19, he said so far it is not showing on the demand pattern and neither anyone expect significant lockdown in terms of economic activity. “Commercial vehicle business compared to what it was one and a half month back has definitely improved now,” P B Balaji added. Even more assuringly financing concerns are now starting to evaporate, he said, adding once the moratorium is cleared, people will see that things are not as bad as they were. “Lots of people want to repay loans on time and therefore we are now seeing improvement in the loan recovery rate and that is ensuring financing coming into commercial vehicles as well. If this trend were to continue, I would expect most of the issues concerning the CV segment resolved in the next three months or so,” P B Balaji said. Despite concerns around the risk of a second wave of infection in many countries and other geopolitical risks, the company expects a gradual recovery of demand and supply in the coming months, Tata Motors said in a statement.