Tata Motors’ Q1 loss doubles to ₹3,680 cr due to JLR impact, slowdown in India and China

Our Bureau New Delhi | Updated on July 25, 2019

Guenter Butschek   -  Bijoy Ghosh

Slowing domestic sales, issues related to JLR and softness in the Chinese market have led to Tata Motors posting a consolidated net loss of ₹3,679.66 crore for the first quarter of this fiscal. This is more than double the ₹1,862.57-crore loss posted in the year-ago period.

Total revenue from operations fell 7.84 per cent year-on-year to ₹61,466.99 crore (₹66,701.05 crore).

“The continued slowdown across the auto industry due to weak consumer sentiments, liquidity stress and the impact of axle load norms, particularly in medium/heavy duty, impacted the overall demand. Despite our continuous turnaround effort, we could not prevent some impact on our Q1 performance,” said Guenter Butschek, the company’s MD and CEO.

“Our EBIT margins this quarter were negative, at -2.5 per cent,” said PB Balaji, Group CFO. “The loss of volumes has resulted in a significant negative operating leverage in the business. The places where the volume drops were significant this quarter: One was the year-on-year impact in China. And the second is in India, where we have been talking about the slowdown and the implications of that at our end.”

Tata Motor’s British luxury arm Jaguar Land Rover posted a pre-tax loss of £395 million, and the company expects increased sales from new models and cost savings from the Project Charge initiative to improve results with a profit for the full year, the company said in a regulatory filing.

Balaji said China has now started stabilising for the company (for JLR) and that this has been a quarter where, despite all the challenging conditions, “the cash outflows have been significantly lower than what was at the same period last year.”

Upbeat on fiscal

“Looking ahead, both our businesses, commercial and passenger vehicles, will leverage Tata Motors’ revived agility and strive to boost consumers’ confidence by various market interventions — from best-in-class product offerings to retail activations and further improved service experience.

“With the Budget announcements and upcoming festival season, we expect some tailwinds for the remaining FY20,” said Butschek.

Published on July 25, 2019

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