Tata Motors’ Q2 loss rises, sees revival in second half2 min read . Updated: 28 Oct 2020, 06:02 AM IST
- Tata Motors on Tuesday said it recorded 103% growth in car bookings and retail sales grew 90% year-on-year during this year’s Navratri and Dussehra days
- Automaker expects demand to pick up for JLR across other geographies in H2FY21
Tata Motors Ltd expects sales and production to improve in the second half of the current fiscal, even as its consolidated losses during the September quarter soared to ₹307 crore. The quarterly earnings still beat a Bloomberg analysts’ poll estimate of a loss of ₹1,970 crore, against the ₹188 crore loss a year ago.
“While China has seen a strong revival in Q2, the company expects demand to pick up for Jaguar Land Rover cars across other geographies in H2FY21," P.B. Balaji, group chief financial officer, Tata Motors said in a media call. Balaji said the recently launched Land Rover Defender range of sport utility vehicles (SUVs) are receiving better-than-expected response. The firm delivered over 9,800 units in Q2 and has an order book of more than 35,000 units.
“Defender is critical for our performance this year. While the deliveries for short-wheelbase Defender 90 will begin soon, we are receiving strong traction for the 5-door version, which augurs well for us in terms of profitability," Balaji said.
JLR plans to drive sales with a slew of product launches, including refreshed Jaguar F-Pace, XF, and XE models and Range Rover Velar, along with new additions to its electric car portfolio. “JLR continues to expect positive free cash flow (FCF) over the second half of the year and remains committed to achieving positive FCF in FY21-22 to reduce net debt and increase financial resilience," Tata Motors said in a note.
Meanwhile, in the home market, light and intermediate commercial vehicles continue to witness sequential recovery faster than initial expectations, Balaji said.
“As the demand for commercial vehicles continues to pick up gradually, we witness that the recovery is faster on ground. A sharp increase in toll collections and fuel consumption are some of the key metrics underlining the pattern," he said, adding that rural demand, pickup in e-commerce, increased infrastructure spends, and mining activities are key growth drivers. Balaji said orders for domestic passenger cars are at an all-time high and the company recorded a sharp increase in retail sales and bookings during Navratri.
Tata Motors on Tuesday said it recorded 103% growth in car bookings and retail sales grew 90% year-on-year during this year’s Navratri and Dussehra days. During Q2, it sold 54,794 cars as against 25,898 units in Q2 last fiscal.
The company saw its total revenue from operations decline 18% year-on-year to ₹53,530 crore during the September quarter on lower sales of passenger and commercial vehicles. JLR recorded positive FCF at £463 million during the quarter, its passenger vehicle business achieved Ebidta break-even during the period on strong customer pull.
The company’s cost-saving steps delivered £0.6 billion (and £1.8 billion in H1 FY21) at JLR and ₹1,500 crore in India business in Q2.