Tata Motors Posts 5,531-Crore Loss as JLR Restructuring Bites
Tata Motors Passenger Vehicles swung to a second-quarter loss of Rs 5,531 crore on November 13, hit by a Rs 6,738 crore one-time charge. Revenue rose to Rs 96,920 crore, but Jaguar Land Rover's full-year guidance was cut.
Tata Motors Passenger Vehicles reported a consolidated loss of Rs 5,531 crore for the July-September quarter on November 13, after a one-time charge of Rs 6,738 crore tied to restructuring at its Jaguar Land Rover (JLR) luxury unit. The company posted a profit in the same quarter a year earlier.
Strip out that charge and the picture changes. Excluding the one-time cost, the company said its bottom line for the quarter was a profit of Rs 1,207 crore.
Revenue up, margins squeezed
Consolidated revenue climbed to Rs 96,920 crore from Rs 72,349 crore a year earlier. JLR is still recovering from a cyberattack that disrupted production and sales last year. The company is also running a restructuring programme that includes employee separation costs and asset impairments.
Chief Financial Officer Dhiman Gupta said the domestic business kept its momentum and JLR delivered resilient volumes. "Adverse mix and persistent commodity pressures weighed on margins," he said. He added that both businesses "remain fundamentally strong".
JLR outlook trimmed
JLR's full-year guidance was revised lower, the company said, citing market challenges, geopolitical risks and the exceptional costs. It now expects an adjusted EBIT margin of 2-3%. EBIT is operating profit before interest and tax, shown as a share of revenue.
The luxury arm also expects a free cash outflow of 1.25 billion pounds. That means more cash going out than coming in over the year.
Domestic business and shares
Managing Director and CEO Shailesh Chandra said the passenger vehicle business recorded quarterly sales of more than 200,000 units. Growth was 40% year on year, he said. Electric vehicle sales rose 90% from a year earlier, and the company unveiled a new customer-facing identity, TATA.CARS.
Shares of Tata Motors PV closed 3.5% lower at Rs 287 on November 13. The results came after the market closed, so the share price had not yet reacted to them.
Other Indian carmakers have had mixed quarters. Maruti Suzuki and Hyundai Motor India reported lower quarterly profits, while Mahindra and Mahindra posted a rise.
In a stock exchange filing, the company named global geopolitical volatility, luxury demand, the pace of electric vehicle adoption and commodity costs as key factors to watch. For JLR, it said the near-term focus is to "build sales momentum from new EV launches".
