Tata Motors Q1 Results: Yet Another Quarterly Loss As Covid-19 Hits Sales
Net loss stood at Rs 8,438 crore in the quarter ended June.
Tata Motors Ltd. reported yet another quarterly loss as the Covid-19 pandemic caused a slump in sales in India and overseas.
Net loss stood at Rs 8,438 crore in the quarter ended June compared with a loss of Rs 3,698 crore a year ago, the automaker said in an exchange filing. Analysts’ estimates compiled by Bloomberg had pegged the loss at Rs 9,620 crore.
Tata Motors has now reported a loss in seven of the last nine quarters.
- Revenue fell 48% year-on-year to Rs 31,983 crore—higher than the Rs 28,247 crore estimate.
- Operating profit fell 79% to Rs 653.3 crore.
- Margin narrowed to 2% compared with 4.87% earlier.
Indian automakers bore the full brunt of the lockdowns across the globe as sales tumbled due to dealerships being closed for large parts of the quarter. Automakers had witnessed a near-complete washout in April. Sales slightly improved in May and June as restrictions eased. That came at a time when vehicle manufacturers were already battling an industry-wide sales slowdown.
“The Covid-19 pandemic has deeply impacted the auto industry in Q1FY21,” said Chief Executive Officer Guenter Butschek in a media statement. “Even as we continue to address the challenges, we see some disruption due to the intermittent shutdowns and supply chain bottlenecks.”
Tata Motors’ luxury car unit Jaguar Land Rover, too, has been facing a prolonged sales slump which was exacerbated by the pandemic. JLR has been grappling with uncertainty surrounding Brexit, stricter emission rules in Europe and a fall in exports to China—one of its fastest-growing markets.
Still, the company hopes for a revival. “We have witnessed some green shoots emerging in passenger vehicles owing to some pent up demand pre Covid, and are hopeful for a full recovery of the commercial vehicle industry by end of the fiscal year, with a gradual pickup of demand, aligned to the economic recovery,” Buetschek said.
Tata Motors has tried to combat the lockdown-related slump by cutting jobs and investments. Last month, it slashed over a thousand more jobs at JLR and said it will reduce its capital expenditure by 65%. The company also deferred or cancelled lower margin and non-critical investment.
In India, Tata Motors is looking to hive off its passenger vehicle and electric vehicle businesses into a subsidiary. It is engaged in talks in several original equipment manufacturers, it had said in June.
The company said it will commit to “significantly” deleveraging the business and aim to generate positive cash flows for the rest of the year.
Shares of the automaker ended 0.96% higher, ahead of the quarterly results, while the benchmark BSE Sensex ended trade 0.34% down.
(Corrects an earlier version that misstated Tata Motors' Q1 Ebitda and margin)