The economic slowdown caused by the coronavirus pandemic has hit hard the auto industry across the globe, as a result, auto major Tata Motors on Friday posted a consolidated net loss of Rs 8,443.98 crore from Rs 3,679.66 crore in the year-ago quarter.
Total revenue from operations stood at Rs 31,983.06 crore as against Rs 61,466.99 crore in the corresponding quarter of the last fiscal.
Tata Motors’ British arm Jaguar Land Rover (JLR) reported a 44 per cent dip in net revenue at 2.9 billion pounds during the first quarter.
Its pre-tax loss for the period stood at 413 million pounds as compared to the same period a year ago.
On the global sales front, JLR reported a 42.4 per cent decline at 74,067 units.
At a post-earnings conference call, Tata Motors Group CFO P B Balaji said that as much as 98 per cent of the JLR retailers were fully or partially open globally and that the sales started improving on a month-on-month basis despite 42.4 per cent fall in volume in the quarter.
According to Guenter Butschek, CEO and MD, Tata Motors, “The COVID-19 pandemic has deeply impacted the auto industry in Q1FY21. Post a calibrated restart at all plants in mid-May, we gradually scaled up our capacity while prudently safeguarding the health and wellbeing of our employees as well as the larger ecosystem.
“Even as we continue to address the challenges, we see some disruption due to the intermittent shutdowns and supply chain bottlenecks. We have witnessed some green shoots emerging in PV owing to some pent up demand pre-Covid, and are hopeful for a full recovery of the CV industry by end of the fiscal year, with a gradual pickup of demand, aligned to the economic recovery,” he added.
The management remains focussed on making the company more agile to improve its market, operational and financial performance by reducing costs, generating free cash-flows and providing the best in class customer experience, the Tata Motors CEO added.
On the pandemic impact, Balaji said, “Overall, COVID-led lockdown impacted us globally. Because of that, we had an overall revenue volume decline of close to 64 per cent and a revenue decline of 48 per cent during the quarter.”
The impact was felt very sharply with wholesale down 80 per cent and revenue down almost 80 per cent as well, he noted.
However, the JLR transformation programme continued to gain momentum resulting in positive EBITDA despite a significant volume drop in the quarter and lower cash outflow as compared to the earlier expectations, he said. “Every region is showing improvement in JLR sales on a month-on-month basis as far as demand is concerned,” Balaji said.
He, however, said “as much as we take on costs and reduce cash burn, demand is a very important lever for this business. And even though sales were improving demand was not coming back in a hurry”.
Tata Motors noted that outlook remains uncertain for the year with infections continuing to rise and intermittent lockdowns in many countries.
“However, we expect a gradual recovery of demand and supply in the coming months,” it added.