Tata Motors posts ₹1,863-cr loss in Q1

Our Bureau Mumbai | Updated on July 31, 2018

Tata Motors posted its worst quarterly loss in nine years at ₹1,863 crore in the quarter ended June 30 as Jaguar Land Rover continues to face headwinds. The company had reported a profit of ₹3,199.93 crore in the same quarter last year.

Revenues were up 12.25 per cent at ₹65,956.78 crore (₹58,766.07 crore).

Jaguar Land Rover, which contributes nearly 90 per cent to Tata Motors’ revenues, reported a loss of £210 million in June quarter as the unit’s revenues fell 6.7 per cent to £5.2 billion due to lower sales and increased incentives in China in advance of the July 1 duty reduction.

“With regard to JLR, we faced multiple challenges including issues like China duty impact as well as the market issues like diesel concerns in UK and Europe," said Chairman Natarajan Chandrasekaran.

Ralf Speth, Chief Executive, said the issues with JLR go beyond China duty impact.

“We also continue to be impacted negatively by uncertainty over diesels in Europe along with Brexit and additional diesel taxes in the UK. Given these issues, we will remain focussed on driving growth and simultaneously reducing costs and boosting operational efficiency and capability, taking the necessary steps to shape our future,” Seth said.

He, however, said that the company expects sales and financial results to improve over the remainder of the financial year, driven by continued ramp-up of new models, most recently the electric Jaguar I-PACE, and with the new lower duties effective in China.

On a standalone basis, Tata Motors revenue jumped 83 per cent year-on-year to ₹16,830 crore. Profit after tax stood at ₹1,188 crore. Tata Motors said that its net debt soared to ₹ 62,436 crore as of June 30 from ₹39,977 crore as of March 31 due to negative free cash flow at both Tata Motors and JLR, and continued investments.

Tata Motors CEO Guenter Butschek also warned of challenges in the company’s commercial vehicles business. “As I look ahead, there could be a few challenges in the short term particularly in Commercial Vehicles as the new regulations on axle loads come into effect but remain positive on the long term potential of the Indian market and I am confident that Tata Motors is taking the right steps to drive Competitive, Consistent, Cash Accretive Growth.”

Tata Motors also announced that its shutting its Thailand plant owing to ‘sub-scale’ business.

Published on July 31, 2018

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