Tata Motors Q2 result update!
Last updated: 27 Oct, 2020 | 02:11 pm
- Loss Widens: Consolidated net loss stood at ₹307.26 crore in the quarter ended September as against a loss of ₹187.7 crore a year ago, beating the consensus estimate loss of ₹1,970 crore. Revenue stood at ₹53,530 crore, down 18% on a yearly basis but above the consensus estimate of ₹48,294.
- PV(Passenger Vehicles) sales impress, CV( Commercial Vehicle) under pressure: Domestic sales rose 13% year-on-year to 1,06,888 units in the second quarter. In India, PV segment continued its strong growth momentum in the quarter and CV witnessed gradual improvement across the segments.CV retails stood at 38.3K showing strong improvement sequentially(12.6 times of the Q1) but down on a yearly basis. PV retails stood at 53.5K, up 73% on a yearly basis supported by festive season and strong demand in the market.
- JLR (Jaguar Land Rover) returns to profit: Jaguar Land Rover returned to profit with significant positive cash flow in the quarter as sales and revenue recovered from the impact of Covid-19. Retail sales of 113,569 units were up 53.3% sequentially, however, retail sales in most markets continued to be impacted by Covid-19 and so were down 11.9% in total on a yearly basis. China sales were particularly encouraging, up 14.6% sequentially 3.7% yearly.
- Positive Free Cash flows: The company reported positive free cash flows in both Jaguar Land Rover and Tata Motors Ltd (Standalone). For JLR, Free Cash Flow was at £463 million after a £531 million of investment spending, primarily reflecting a £528 million recovery in working capital following the restart of production and the reopening of the global retailer network. For the Indian arm, free cash flows stood at a positive ₹2,300 crore. The company has been battling negative free cash flows for the past few quarters, and the management aims to maintain positive free cash flows in the near future by cost reduction and efficient investment spending.
Despite concerns around the risk of a second wave of infections in many countries and other geopolitical risks, the management expects a gradual recovery of demand and supply in the coming months. The management also said that they are committed to achieving near-zero net automotive debt in the coming years by focusing on better front-end activations of their exciting product range and executing cost and cash savings with rigour.