Tata Motors Q1 loss doubles to Rs 3,679 crore on subdued volumes, JLR continues to disappoint

Auto major Tata Motors on Thursday reported a consolidated net loss of Rs 3,679.66 crore for the first quarter ended June 30, 2019, dented by muted volume growth in domestic business as well as in its British arm Jaguar Land Rover (JLR).

"The company had posted consolidated net loss of Rs 1,862.57 crore in June quarter of 2018 and profit of Rs 1,117.48 crore in March quarter 2019," Tata Motors said in a filing to the Bombay Stock Exchange.

The company said profit was impacted by demand slowdown, higher axle loads, liquidity stress, low freight availability for cargo operators.

Consolidated revenue declined by 7.84 per cent to Rs 61,467 crore as compared to Rs 67,701 crore in the year-ago period, Tata Motors said in the regulatory filing.

The operating profit, or EBITDA (earnings before interest, tax, depreciation and amortisation) dipped 130 basis points (bps) YoY to 6.2 per cent, while EBIT margin plunged 170 bps to a negative 2.5 per cent.

The firm's luxury arm JLR posted a loss of 402 million pounds and its pre-tax loss stood at 383 million pounds.

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Speaking on JLR's performance, the company said, "The results are consistent with the outlook for the quarter and primarily reflect lower revenue resulting from the weaker market conditions. Additional plant shutdown time and delays in WL TP certification resulting from Brexit contingency planning also contributed to the lower sales and profits."

On a standalone basis, the company posted net loss of Rs 147.45 crore as against net profit of Rs 1,161.85 crore in the year-ago quarter. Total revenue decreased to Rs 13,351.91 crore from Rs 16,674.99 crore in the same period of previous fiscal.

Finance costs increased by Rs 336 crore to Rs 1,712 crore during Q1FY20 versus prior year. This includes Rs 112 crore on account of lease liability accounting under IFRS 16.

During the quarter under review, wholesales (including exports) decreased 22.7 per cent to 136,705 units, while retail sales declined 12.6 per cent on yearly basis.

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Commenting on Q1 earnings, Guenter Butschek, CEO and MD, Tata Motors, said, "The continued slow down across the auto industry due to weak consumer sentiments, liquidity stress and the impact of axle load effect particularly in medium/heavy duty, impacted overall demand. Over the past few years we had struck a good balance between managing market dynamics and financial health. However, this time, despite our continuous turnaround effort we could not prevent some impact on our first performance."

"Jaguar Land Rover is in a period of major transformation. We are simplifying our business, delivering on our product strategy and adapting to the tough market environment," said Ralf Speth, JLR Chief Executive.

Ahead of Q1 earnings, shares of Tata Motors settled 4.56 per cent lower at Rs 144.35 on the BSE.

Edited by Chitranjan Kumar