The auto major's consolidated net loss stood at Rs 1,451.05 crore in Q3 FY22 as against a net profit of Rs 2,941.48 crore posted in Q3 FY21.
Consolidated total revenue from operations fell 4.52% to Rs 72,229.29 crore in Q3 FY22 from Rs 75,653.79 crore posted in Q2 FY21. Total tax expenses dropped 23.18% to Rs 726.05 crore in Q3 FY22 as against Rs 945.18 crore in Q3 FY21.
The company's finance costs increased by 12.92% to Rs 2,400.74 crore during Q3 FY22 as compared to prior year due to higher gross borrowings as compared to Q3 FY21. Consolidated EBITDA margin fell 460 basis points year-on-year to 10.2% in Q3 FY22. Free cash flow (automotive) during the quarter, was positive stood at Rs 4,000 crore as compared to positive Rs 7,900 crore in Q3 FY21.
Tata Motors (Standalone):
In Q3 FY22 wholesales (including exports) increased 30.4% to 2,00,212 units. The volumes across all segments significantly grew as compared to Q3 FY21, despite supply challenges whilst there was all round market share gains in both CV and PV. Revenue for the quarter increased 43.3% to Rs 21,000 crore and pre-tax loss before exceptional was at Rs 834 crore over a loss of Rs 542 crore in Q3 FY21. The PBT decline was mainly caused due to commodity inflation despite improved volumes and mix. EBIT margin was at 1.7%, falling 200 bps in the quarter. Free cash flow for the quarter stood at Rs 2,000 crore.
For its outlook, Tata Motors (Standalone) highlighted that the demand situation continued to remain strong despite near term concerns from Omicron spread. The supply situation is gradually improving. However, a sharp commodity inflation continued to remain a challenge. Sequential improvement in overall performance is expected to continue in Q4 FY22 and beyond, and the company targets to be EBIT and free cash flow positive in Q4 FY22.
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Additionally, in commercial vehicles, the focus remains to grow the market share across segments and restore margins as commodity inflation stabilizes. In passenger vehicles, the company will continue to accelerate sales further 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, the executive director of Tata Motors, has said, "The auto industry continued to witness rising demand in most segments even as the supply of semiconductors remained restricted resulting in adverse impact on production. At Tata Motors, our agility in both planning and execution, helped optimize production to deliver another strong quarter with accelerated sales. We continue to increase market share in every segment of commercial vehicles and set several new milestones in passenger vehicles with decade high sales for both the quarter as well as the calendar year 2021. We also recorded the highest ever EV sales during the quarter and sold 10,000 EVs in 9M FY22, crossing new milestones. At the time of publishing results, we have operationalized two subsidiaries - Tata Motors Passenger Vehicles, focusing on passenger vehicles powered by IC engines and Tata Passenger Electric Mobility to accelerate the development of the passenger EV business and its enabling ecosystem."
"Looking ahead, we expect the demand for commercial, passenger and electric vehicles to sustain even as concerns related to supply of semiconductors, high input costs and rising instances of covid keep the overall situation fluid. We will remain agile, address supply bottlenecks proactively, drive our savings program harder, take prudent pricing actions while continuing to make good progress in our future-fit initiatives of transforming customer experience digitally and strengthening our lead in sustainable mobility," Mr Wagh added.
Jaguar Land Rover (JLR):
The wholesales to dealers in Q3 stood at 69,182 units, growing 8% on Q2 FY22 with production volumes rising 41% to 72,184 units. However, overall sales remain significantly constrained by chip shortages and low inventories with retail sales in Q3 of 80,126 vehicles, falling 13.6% from Q2 FY22 and 37.6% from Q3 FY21. The mix of electrified retail sales (BEV, PHEV and MHEV) increased to 69% in Q3 as compared to 53% a year ago. While regional sales broadly followed total sales, model mix was stronger with wholesales of the Range Rover model family up 30%. The demand remained strong with a record order book of almost 1,55,000 vehicles, up 30,000 units from Q2, witnessing a strong demand for the new Range Rover, with deliveries for the model to start later in Q4 FY22.
For Q3, the revenue was at 4.7 billion, growing 22% from Q2 FY22. The EBIT margin improved from Q2 to 1.4% and free cash flow improved to 164 million, reflecting the increased wholesale volume, more favourable mix, pricing and FX, partially offset by a provision for quality campaigns. PBT was a (9) million loss in the quarter.
The refocus transformation programme has delivered 1 billion of value in the first three quarters of FY22 through digital initiatives, market performance, cost efficiency and investment. The programme is now expected to achieve 1.4 billion of value in FY22, beating the original 1 billion target.
For its outlook, the semiconductor shortage is expected to continue through 2022 but is expected to gradually improve as capacity within the supply base increases, while the company is also engaging with first-tier suppliers and directly with the chip manufacturers to secure supply longer-term. With this gradual expected improvement, Jaguar Land Rover expects Q4 profits to improve from Q3 with positive cashflow.
Furthermore, JLR's medium- and longer-term financial targets under the Reimagine strategy, underpinned by the Refocus transformation programme, remain unchanged, including increasing EBIT margins to 10% or more by FY26.
Thierry Bollor the chief executive officer (CEO) of Jaguar Land Rover, said, "Whilst semiconductor supplies have continued to constrain sales this quarter, we continue to see very strong demand for our products underlining the desirability of our vehicles. The global order book is at record levels and has grown an incredible 30,000 units for the New Range Rover before deliveries even start this quarter. 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."
Overall, Tata Motors stated that demand remained strong despite near term concerns from Omicron spread. The semiconductor supply situation is improving gradually whilst inflation worries persist. With concerted actions in place to address the near-term supply and cost challenges, Tata Motors expects performance to improve further in Q4 FY22 and beyond.
Shares of Tata Motors rallied 4.04% to close at Rs 517.50 on BSE. 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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