Tata Motors Q2 Results: Net Loss Narrows To Rs 898 Crore, Income Improves

Tata Motor's total income increased to Rs 80,650 crore in the period under review, as compared to Rs 62,246 crore in the year-ago period

Tata's commercial vehicle (CV) business clocked 15 per cent growth in sales over Q2 FY22. ( Image Source :Getty )

Tata Motors on Wednesday reported a net loss of Rs 898 crore for the second quarter ended September 30, 2022 (Q2). The Indian auto major had logged a net loss of Rs 4,416 crore in the July-September period of the last financial year.

Total income increased to Rs 80,650 crore in the period under review, as compared to Rs 62,246 crore in the year-ago period.

On a standalone basis, the company reported a net loss of Rs 293 crore. It had posted a net loss of Rs 659 crore in the same period a year ago. Total income rose to Rs 15,142 crore in the second quarter, as compared to Rs 11,197 crore in the same period last year.

Tata's commercial vehicle (CV) business clocked 15 per cent growth in sales over Q2 FY22. For India business, domestic wholesales were at 93,651 vehicles (19 per cent YoY). However, exports were at 6,771 vehicles, lower by 22 per cent affected by financial crisis in few export markets. Domestic retails grew at a higher rate as compared to wholesales (23 per cent YoY). The margin improvement was aided by higher volumes, realizations, although impacted by residual commodity inflation and adverse effects.

Passenger vehicle (PV) business continued its strong momentum with wholesales at 142,755 vehicles (69 per cent YoY and 10 per cent QoQ), amid strong festive demand and debottlenecking actions. EBIT margins improved by 200 bps YoY to 0.4 per cent because of higher volumes, mix and improved realisations. However, margin recovery was impacted due to residual commodity inflation and adverse effects

The company said that demand continues to remain strong, however 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 H2FY23.

Girish Wagh, executive director, Tata Motors Ltd, said, “In Q2 FY23, the CV industry witnessed consistency in demand across segments. Our sharp focus on retail resulted in retail sales outperforming wholesale by 1.3 per cent during Q2 FY23. To better serve the evolving needs of our customers, we launched an efficient range of smart trucks in MHCV and ILCV segments, as well as best-in-class pickups, raising the benchmarks for safety, comfort, load carrying capacity while reducing their total cost of ownership. Going forward, we continue to remain in the agile mode and are keeping a close watch on the evolving geopolitical, inflation and interest rate risks on both supply and demand. We will drive the business on ‘Demand Pull’ by focusing on customer connect, product innovation, service quality and thematic brand activations thereby improving customer affinity for our brands, step up registration market shares sustainably, and improve realisations and profitability.”

Revenue of Jaguar Land Rover (JLR), a subsidiary of Tata Motors, was £5.3 billion in Q2 FY23, up 36 per cent year-on-year (YoY) from Q2 FY22 reflecting strong model mix and pricing with wholesale volumes (excluding China JV) of 75,307 up 17.6 per cent YoY and 4.9 per cent on the prior quarter, according to the exchange filing.

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, Tata Motors said.

Thierry Bolloré, Jaguar Land Rover’s CEO, said, “We delivered a stronger financial performance in the second quarter as production of our new Range Rover and Range Rover Sport ramped up, improving revenue, margins and cash flow, despite continuing semiconductor constraints. Demand for our most profitable and desired vehicles remains strong and we expect to continue to improve our performance in the second half of the year, as new agreements with semiconductor partners take effect, enabling us to build and deliver more vehicles to our clients.”

Shares of Tata Motors on Wednesday closed 0.44 per cent down at Rs 433 apiece on the BSE.