The auto major's consolidated net loss stood at Rs 4,441.57 crore in Q2 FY22 as against a net loss of Rs 314 crore posted in Q2 FY21.
Consolidated revenue from operations grew 14.7% to Rs 61,379 crore in Q2 FY22 from Rs 53,530 crore posted in Q2 FY21. The company posted a pre tax loss of Rs 3,467 crore in Q2 FY22 as compared to a net loss of Rs 819.55 crore posted in Q2 FY21.The company's finance costs increased by 19.3% to Rs 2,327 crore during Q2 FY22 as compared to prior year due to higher gross borrowings. Consolidated EBITDA margin fell 210 basis points year on year to 8.4% in Q2 FY22. Free cash flow (automotive) in the quarter, was negative Rs 3,200 crore (as compared to positive Rs 6,700 crore in Q2 FY21) of which Rs 2,000 crore was due to working capital unwind.
Tata Motors (Standalone)
In Q2 FY22 wholesales (including exports) increased 56.3% to 171,823 units. The volumes across all segments significantly grew as compared to Q2 FY21, however supply challenges had an adverse impact during the quarter. India operations showed significant improvement as compared to Q2 a year ago, however the supply chain issues, and commodity inflation impacted the margins. PV business continued its turnaround journey and strengthened its double-digit market share with decade high quarterly sales. EV business recorded nearly three-fold growth and recorded highest monthly and quarterly sales of 1,078 units and 2,704 units, respectively. The auto major said that the business scenario continues to show gradual improvement. However, the company clarified that there are significant challenges on the supply side including semi-conductor issues and sharp commodity inflation. Sequential improvement in overall performance is expected to continue.
In Commercial Vehicles space, the company's focus remains on growing market share (SCV in particular) and protecting margins amidst an inflationary environment. In Passenger Vehicles, the company said it will continue to enhance the sales momentum by leveraging and enhancing its portfolio whilst improving profitability and managing supply bottlenecks. In Electric Vehicles, the company will drive up penetration and accelerate sales further and complete the conditions precedent for securing closure of the TPG Rise Climate investment and drawdown Tranche 1.
Girish Wagh, executive director of Tata Motors said, The auto industry witnessed a consistent increase in demand, in sync with the overall growth of the economy and continuing preference for personal mobility. At Tata Motors, we successfully ramped up production by prudently addressing supply side challenges. During the quarter, we accelerated the sales momentum to increase market share in every segment of commercial vehicles, recorded a decade high sale in passenger vehicles and delivered the highest ever quarterly sales in electric vehicles. Looking ahead, we expect the demand for commercial, passenger and electric vehicles to remain strong even as concerns about the supply of semiconductors and high input costs continue. We are taking definitive actions in the near term to mitigate these effects through an agile, multi-pronged approach to address supply bottlenecks and drive our savings program harder. In parallel, we continue to progress our future-fit initiatives of transforming customer experience digitally and strengthening our lead in sustainable mobility.
Jaguar Land Rover
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For the quarter, JLR's revenue was at 3.9 billion with a pre-tax loss of 302 million (EBIT margin -4.7%). Free cash outflow stood at 664 million, after 484 million of investment spending and 501 million volume-related working capital outflow. This was significantly better than prior guidance for a 1 billion free cash outflow, reflecting prioritised production of higher margin products and cost controls to reduce the cash break-even point for the company, the company said in a press release.
Wholesales to dealers in the quarter were at 64,032 vehicles, down 12.8% year-on-year, and retail sales (including the China Joint Venture) stood at 92,710 vehicles, down 18.4% YoY, reflecting the semiconductor shortage and lower retailer inventories Retails were lower year-on year in most regions, including North America (-15.6%), China (-6.3%), Europe (-17.0%), and in the UK (-47.6%), but were up in Overseas region (+10.0%). Despite the impact of the semiconductor shortage on production and sales, the company said it continues to see strong demand for its products with global retail orders at record levels of more than 125,000 vehicles.
Looking ahead, JLR said the semiconductor shortage remains dynamic and difficult to forecast, however, it expects to see gradual recovery starting in the second half of FY22. While supply remains constrained, JLR assured that it will continue to take mitigating actions, including prioritising the production of higher margin vehicles for the available supply of semiconductors and closely managing costs to bring down the break-even point for the business. Further, JLR said it is taking measures to increase the future visibility and control over semiconductor supply for its vehicles, working closely with semiconductor and Tier One suppliers. As a result, JLR expects the EBIT margin and free cash flow (before restructuring costs) to turn positive in the second half of Fiscal 2022.
Thierry Bollore, CEO of Jaguar Land Rover said, The global semi-conductor shortage remains challenging but I'm pleased to see the actions we have been implementing reduce the impact. With strong customer demand with a record order book we are well placed to return to strong financial performance as semiconductor supply begins to improve. At the same time, we continue to execute our Reimagine strategy to realise the full potential of the business and create the next generation of the most desirable luxury vehicles for the most discerning of customers - starting with the stunning new Range Rover.
Shares of Tata Motors closed 0.4% higher at Rs 485.70 on Monday. The scrip has rallied 45.7% in the last one month alone. Since the start of 2021, the Tata Group's stock has given stellar returns to investors, rising 164%, while the Nifty 50 index has gained 28% in the same period.
Tata Motors, part of the Tata group, is a global automobile manufacturer of cars, utility vehicles, pick-ups, trucks and buses.
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