Tata Motors Ltd (TML) has reported a consolidated net loss of ₹217 crore in Q2FY20 on increased tax expenses and accumulated losses from joint ventures, primarily the Cherry Jaguar Land Rover Automotive Company Ltd, its JV unit in China.
The company has reported accumulated losses of ₹363 crore in Q2FY20 as against a profit of ₹86 crore under the same head in Q2FY19. On year-on-year basis, the company has managed to narrow down its losses, which stood at ₹1,049 crore in Q2FY19 on high quarterly expenditures.
TML has reported operational revenues of ₹65,432 crore in Q2FY20 as against ₹71,981 crore from the year-ago period. The 9% YoY decline in revenues were on account of subdued performance across Jaguar Land Rover (JLR) and its domestic business. JLR accounted for about 81% of Tata Motors’ operational revenues in the September quarter.
The British luxury carmaker had earlier reported retail sales of 128,953 units for the quarter ended September, down 0.7% YoY. The performance could have been worse but for a recovery in China, its biggest market, where retail sales grew 24.3% year-on-year.
Giving clarity to Mint on the JLR business, PB Balaji, group CFO, TML said that although the locally manufactured JLR models (under JV with Chery) continue to report losses, the imported car business has seen strong demand, thereby turning around the overall retails.
JLR’s retail sales were also slightly up (+0.9%) in Europe, which along with China recovery, covered up for lower sales in the US (-1.0%), UK (-5.1%) and in other overseas markets (-19.2%).
Commercial and passenger vehicles contributed ₹8,713 crore and ₹2,056 crore respectively to TML’s consolidated revenues. The company’s standalone revenues were down 44% YoY at ₹10,000 crore on the continued demand slump for passenger and commercial vehicles in India. TML has reported a sharp drop of 44% in its wholesales, which stood at 106,349 units in Q2FY20. Medium and heavy commercial vehicle (MHCVs) wholesale were most hit with a YoY decline of 59%. The company’s standalone EBIT stood at -9.8% on adverse mix and negative operating leverage.
Tata Motors has also announced that its board of directors has approved a preferential allotment of ordinary shares and warrants to Tata Sons for an amount of ₹6,500 crore, subject to shareholder approval.
Balaji said that the equity infusion from the promoters, Tata Sons, will help TML to largely reduce its debts. Meanwhile, TML’s board has also approved an external commercial borrowing of up to ₹3,500 crore aimed at refinancing the existing debts.
Balaji said that TML’s total (automotive) debt stands at around ₹50,000 crore, wherein the standalone debt is about ₹20,000 crore.
The CFO added that the company has seen growing retail sales month-on-month on account of the ongoing festive season in the domestic market.