Tata Motors Q3 Results: Reports Profit After Seven Quarters Of Losses

Tata Motors Ltd. reported net profit in the quarter ended December after seven straight quarters of losses.

The automaker's consolidated net profit stood at Rs 2,957.7 crore for the third quarter, against a net loss of Rs 1,516.1 crore in the same quarter last year, according to the exchange filing. That compares with the Rs 368.7-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue rose 23% to Rs 88,488.6 crore against an estimate of Rs 83,280 crore. 

• Operating profit rose 53% to Rs 10,820.2 crore, compared to a forecast of Rs 6,640 crore.

• Operating margin stood at 12.2%, as against 9.8% last year, and an estimate of 8%.

Tata Motors' total commercial vehicle sales fell 4.2% year-on-year to 95,914 units in the quarter, while the passenger vehicle sales jumped nearly 33% to 1.32 lakh units.

Jaguar Land Rover's wholesale sales rose 5.7% sequentially and 15% year-on-year in the quarter as supply of semiconductors improved at the U.K.-based subsidiary.

As on Dec. 31, 2022, the total order book increased to 2.15 lakh units, up around 10,000 orders from the September quarter.

Demand for the New Range Rover, New Range Rover Sport and Defender remain strong and represent 74% of the order book, the company said in a press release earlier this month.

"Although there continues to be supply chain and other macro risks, our guidance for the full year remains unchanged. Positive EBIT margin and free cashflow in Q4 FY23 on wholesales of 80,000 or more are expected to achieve breakeven free cashflow and a positive EBIT margin for the full year," JLR said in the release.

The luxury car-maker’s management lowered its guidance for the financial year ending March after constrained chip supply continued to limit production.

The company aims to maintain positive EBIT margin for the current fiscal, compared to an earlier guidance of 5%. It expects to break-even at the free cash flow level over the same period, against an earlier indication of £1 billion free cash flow for the year.

Wholesales in China during the quarter were impacted by lockdowns, leading to dealership closures followed by high rates of staff absence as Covid-19 restrictions were relaxed, the company said. The situation is expected to recover in the fourth quarter with dealerships open and staff absence closer to normal levels in January, it said.

Margin expansion at the consolidated level was led by the commercial vehicle and passenger vehicle business, even as JLR's Ebitda margin contracted year-on-year.

Realization improvement coupled with commodity softening and cost control resulted in improved margins, said Girish Wagh, executive director at Tata Motors, in a statement.

Shares of Tata Motors ended 0.8% lower before the results were announced, against a 1.3% fall in the benchmark Nifty 50.