An ET Now poll had projected a net loss of Rs 2,300 crore.
The auto major’s total revenue from operations dropped by 18.19 per cent to Rs 53,530 crore, from 65,431.95 crore a year ago.
The company said its revenue in the six months ended September 30 had been impacted as the group’s manufacturing plants and offices had to be closed down for a considerable period of time due to the Covid-19 pandemic
“Lockdowns have impacted the company operationally including on supply chain matters. The company is monitoring the situation closely taking into account directives from the governments. Further, the Reserve Bank of India (RBI) has announced moratorium on loan repayments for specific borrower segments, which impacts Group s vehicle financing business in India,” Tata Motors said.
“Management believes that it has taken into account all the possible impacts of known events arising from Covid-19 pandemic in the preparation of the financial results, including but not limited to its assessment of Group’s liquidity and going concern, recoverable values of its property, plant and equipment, intangible assets, intangible assets under development, allowance for losses for finance receivables and the net realisable values of other assets,” it added.
The auto major said its Jaguar Land Rover (JLR) unit returned to profit with significant positive cash flow in the quarter as sales and revenue recovered from the impact of Covid-19 in fiscal Q1, but remain below the pre-Covid levels from a year ago.
JLR’s retail sales of 113,569 units were up 53.3 per cent quarter-on-quarter (QoQ) with almost all retailers now open, but the retail sales in most markets continued to be impacted by Covid-19 and hence were down 11.9 per cent in total year-on-year.
That said, China sales were particularly encouraging, up 14.6 per cent on the prior quarter and 3.7 per cent year-on-year.
“Although Jaguar Land Rover is not immune to the headwinds impacting the global automotive industry, it has the foundations in place to generate long-term sustainable profitability,” said JLR CEO Thierry Bolloré.
For Tata Motors, passenger vehicle (PV) segment continued its strong growth momentum in the quarter and commercial vehicle (CV) witnessed gradual improvement across the segments.
The company said that PV segment achieved EBITDA breakeven led by strong customer pull for its ‘NEW FOREVER’ range, while CV profitability improved sequentially but continues to be impacted by lower volumes and adverse mix on a Y-o-Y basis.
For the company as a whole, despite concerns around risk of second wave of infection in many countries and other geopolitical risks, Tata Motors expects a gradual recovery of demand and supply in the coming months.
“In this context, we are committed to achieving near zero net automotive debt in the coming years by focusing on better front-end activations of our exciting product range and executing our cost and cash savings with rigour,”it said in a release.
“In PV, we accelerated the momentum built in Q1FY21 and saw demand gradually emerge in select segments of CV. We remain hopeful for a full recovery in CV industry by the end of this fiscal year aligned to the overall improvement in the economy,” said Guenter Butschek, CEO and MD, Tata Motors.
“During the quarter, we delivered on our planned improvements in our operational and financial performance. We reiterate our commitment to make Tata Motors more agile by reducing costs, generating free cash flows, and providing the best in-class customer experience,” he added.
The company’s finance costs increased by Rs 114 crore to Rs 1,950 crore in the quarter due to higher gross borrowings.
For the quarter, net profit from joint ventures and associates amounted to Rs 36 crore compared with a loss of Rs 363 crore in the previous year.
The Tata Motors and JLR businesses generated cash flows of Rs 2,300 crore and UK pound 463 million in the quarter.