NEW DELHI :
Homegrown automaker Tata Motors on Thursday reported that it narrowed its losses at ₹1,033 crore in the quarter ended March, compared with the year-ago period in which it posted a net loss of ₹7,605 crore. High commodity costs, lower wholesales at its UK-headquartered subsidiary Jaguar Land Rover (JLR), and a global chip shortage weighed on the company’s performance. A one-time exceptional charge of £43 million to account for loss of sales that JLR faced in Russia also contributed to the net loss. Sales in Russia accounted for 2.5% of JLR’s total volumes.
The automaker also reported an 11.5% drop in revenues in the March quarter year-on-year (y-o-y), at ₹78,439 crore.
The company noted a sequential improvement in all its business segments, including JLR, domestic passenger vehicle (PV),
EVs, and commercial vehicle (CV) business, but highlighted that inflationary pressures and disruptions in supply chains, including those arising from fresh covid-19 related lockdowns in China, will likely play spoilsport in the first quarter of the ongoing fiscal year.
“Several parts of China are in lockdown as we speak because of the Chinese government’s zero-covid policy. As a result, the supply chain has been impacted. We need to watch out for quarter one this year in terms of the availability of supplies from China on a consistent basis and take action accordingly,” P.B. Balaji, group chief financial officer, Tata Motors, told reporters on a conference call.
The auto major maintained a cautious outlook to Q1FY23 also on the back of a model changeover for the Range Rover Sport, which may limit volume improvement and result in negative cash flows in the ongoing quarter. But for the full year FY23, Tata Motors expects to deliver £1 billion in free cash flows based on a “conservative plan” as semiconductor supplies and production improve.
“We expect to see demand remain strong despite the geopolitical concerns and inflation. The supply situation is easing, though there are concerns we have covid in China. Commodity inflation may remain elevated and we need to prepare for that,” Balaji said.