Tata Motors Ltd today reported a consolidated net loss of Rs 15.2 billion in the three months to December 31, 2021 against a profit of 29.1 billion in the same quarter last year.
In Q3FY22 wholesales (including exports) increased 30.4% to 200,212 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 ₹21.0KCr and pre-tax loss before exceptional was ₹ 834Cr (vs loss of ₹ 542Cr in Q3FY21). PBT decline was mainly caused due to commodity inflation despite improved volumes and mix. EBIT margin was (1.7) % (-200 bps) in the quarter. Free cash flow for the quarter was ₹ 2.0 KCr.
Wholesales to dealers in Q3 were 69,182 units, up 8% on Q2 FY22 with production volumes up 41% to 72,184 units. Overall, however, sales remain significantly constrained by chip shortages and low inventories with retail sales in Q3 of 80,126 vehicles, down 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 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%. Demand remains strong with a record order book of almost 155,000 vehicles, up 30,000 units from Q2 reflecting strong demand for the New Range Rover, with deliveries for the model to start later in Q4 FY22.
For Q3, revenue was £4.7 billion, up 22% from Q2 FY22. 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.
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.
Thierry Bolloré, Jaguar Land Rover’s Chief Executive Officer, 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.”
Girish Wagh, Executive Director Tata Motors Ltd 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 9MFY22, crossing new milestones. At the time of publishing results, we have operationalized two subsidiaries- Tata Motors Passenger Vehicles Ltd. focusing on passenger vehicles powered by IC engines and Tata Passenger Electric Mobility Limited 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.”
Finance costs increased by ₹ 275Cr to ₹ 2,401Cr during Q3FY’22 vs prior year due to higher gross borrowings as compared to Q3’FY21. For the quarter, net loss from joint ventures and associates amounted to ₹113Cr compared with a loss of ₹ 281Cr in prior year. Other income (excluding grants) was ₹ 197Cr versus ₹ 166Cr in the prior year.
Passenger Vehicle (PV) division revenues and expenses (including FIAPL) is presented as “Discontinued Operations” in the standalone financials (SEBI results) with the net result of PV division being disclosed as a single amount as profit or loss from Discontinued Operations. After roll back of depreciation of PV assets of Rs. 527 cr, the profit before tax (after exceptional item) from Discontinued Operations was Rs. 835 cr (as compared to Rs. -381 cr in Q3FY21).