Tata Motors Q3 PAT jumps 65% to Rs 3,222 cr

On a consolidated basis, the auto major's net profit surged 64.9% to Rs 3,222.21 crore on 5.4% rise in net sales to Rs 74,878.98 crore in Q3 December 2020 over Q3 December 2019.

Consolidated profit before tax (PBT) soared 208.70% to Rs 4,167.39 crore in Q3 December 2020 as against Rs 1,349.92 crore in Q3 December 2019. Current tax expense for the quarter jumped 22.7% to Rs 675.45 crore as against Rs 550.33 crore in Q3 December 2019. The Q3 result was declared post trading hours yesterday, 29 January 2021.

For Jaguar Land Rover (JLR), the quarter reflected strong sequential recovery in retails in all the markets except UK where Q3 remains seasonally lower. The business achieved 6.7% EBIT margin and strong positive free cash flows of 0.6b reflecting the recovery in sales, favourable mix and Charge+ delivery. Charge+ delivered 0.4b of savings in the quarter and 2.2b year to date.

 

India operations continued its strong growth in the quarter with commercial vehicle (CV) witnessing a sequential recovery and PV witnessing continued strong growth of its New Forever portfolio. Passenger vehicle (PV) absolute EBITDA is the highest in last 10 quarters. CV profitability improved sequentially due to better mix (higher MHCV & ILCVs) and ongoing cost savings. Business generated strong positive free cash flows led by the cash savings initiatives which yielded 2600 crore in the quarter and 5100 crore year to date.

In its outlook, the auto major said that despite continued pandemic related uncertainties, supply bottlenecks and commodity inflation, it expects to consolidate our gains and end the fiscal year on a strong note. We remain committed to consistent, competitive, cash accretive growth and deleverage the business through our focused execution of our strategy in all our businesses.

Guenter Butschek, the chief executive officer (CEO) and managing director (MD) of Tata Motors, said that: "The auto industry witnessed a strong sales momentum in Q3 FY21, driven by the pent-up demand and a steady recovery of the economy. We could leverage the improved demand by a consistent ramp-up of production, addressing supply chain bottlenecks. Due to a strong festive season and a clear preference for personal mobility the PV business posted its highest sales in last 33 quarters. In the CV business the M&HCV and ILCV segments led the overall CV growth of over 48% higher domestic sales compared to the previous quarter. We improved our operational and financial performance by reducing costs, generating free cash flows, providing 'best in class' customer experience. Despite the current global challenge of semiconductor supplies, we are confident of keeping our performance improvement on track in this quarter to close the year on a high for an even stronger play in FY22."

For Jaguar Land Rover (JLR), the fiscal Q3 FY20 retail sales stood at 1.28 lakh vehicles, recording a growth of 13.1% on Q2 FY20 but still 9% lower than pre-COVID-19 levels a year ago. Sales in China jumped 20.2% on the prior quarter and up 19.1% year-on-year (Y-o-Y). Most other regions also witnessed a sequential recovery though still below prior year. Sales of the new Land Rover Defender grew to 16,286 units, registering a growth of 66% over the previous quarter.

In its outlook, JLR remains encouraged by the Brexit trade deal agreed in December 2020 between the UK and the European Union (EU). This has avoided the risk of tariffs on automotive parts and finished vehicles, although there will still be increased customs administration requirements. The approval of effective COVID-19 vaccines is also encouraging, with the promise of an eventual end to the pandemic. While the current infection rates and associated restrictions are a challenge, all of the company's plants are open and majority of retailers in most regions remain open.

In markets where showrooms are closed by restrictions, for example in the UK, sales are generally able to continue through online ordering systems on a "click and deliver" basis. In this environment, Jaguar Land Rover continues to expect a gradual improvement in sales supported by new and refreshed vehicles incorporating the latest technologies. Despite the external challenges, the company continues to expect to generate strong EBIT margins and positive free cash flow in Q4 FY21 and targets achieving positive free cash flow in subsequent years, reduce net debt and increase financial resilience.

Thierry Bollor the CEO of Jaguar Land Rover, said: "I am encouraged by the improved financial performance in this first full quarter as CEO of Jaguar Land Rover. This performance is a credit to the outstanding efforts of the employees of Jaguar Land Rover to overcome many challenges this year and I would like to thank every one of our colleagues for their contribution, particularly those who are working safely in our plants and facilities. Looking ahead, these challenges continue, including the Covid pandemic and its impact on the global economy, the UK's new trading relationship with the EU and the significant technological changes taking place in the automotive industry. In this environment, I'm working with my management team on plans to realise an exciting future for Jaguar Land Rover, which I look forward to sharing in due course."

Shares of Tata Motors fell 1.59% to close at Rs 262.60 on Friday. Tata Motors, part of the Tata group, is a global automobile manufacturer of cars, utility vehicles, pick-ups, trucks and buses.

Powered by Capital Market - Live News