Tata Motors' Q1 loss widens to Rs 5,007 cr; revenue rises 8%

'We expect demand to remain strong despite worries on inflation and geo-political risks while the supply situation is expected to improve further,' says the company

Tata Motors Ltd posted a bigger first-quarter loss on Wednesday. 

The Jaguar Land Rover parent reported a consolidated net loss of Rs 5,007 crore for the quarter ended June 30, compared with a loss of Rs 4,451 crore a year earlier.

On Wednesday, the company's scrip on BSE closed 0.66% higher at Rs 443.95.

The company's consolidated revenue from operations rose 8% to Rs 71,935 crore as against Rs 66,406 crore in Q1FY22. 

"We expect demand to remain strong despite worries on inflation and geo-political risks while the supply situation is

expected to improve further. Cooling commodity prices are expected to aid improvement in underlying margins. We aim to

deliver strong improvements in EBIT and free cash flows from Q2 onwards to get to near net auto debt free by FY24," the company said in a stoc exchange filing.

“The CV industry continued to witness rising demand across all segments led by a reviving economy. With the sequential easing

of semiconductor shortage and our ramp-up agility, Tata Motors delivered a strong quarter with sales of 101,113 units

registering 100% growth versus Q1FY22. During Q1FY23, we marked a significant leap forward in our commitment towards

promoting sustainable mobility with the delivery of 100 e-buses and successful launch of the Ace EV, which provides a green

and smart transport solution for a wide variety of intra-city applications. 

"We also signed a strategic Memorandum of Understanding with leading e-commerce companies and logistics service providers to deliver 39,000 units of the Ace EV along with its enabling eco-system. Furthermore, we also received a letter of allocation of 1500 e-buses from Delhi Transport Corporation, as part of the larger entitled order of 5000 e-buses, from the recently won CESL tender. Going forward, we remain cautiously optimistic about overall CV-demand while keeping a close watch on interest rates, input costs, transporter profitability, and semiconductor availability," said Girish Wagh, Executive Director Tata Motors Ltd.

Automakers globally have increased prices to offset higher costs that have squeezed profit margins in a sector that has been striving to recover from a pandemic-induced slump.

Tata Motors has raised prices of both commercial and passenger vehicles twice since April, after increasing them four times in fiscal year 2022.

Still, high costs pinched the company with a 26% jump in the cost of materials.

Rival Maruti Suzuki India said earlier in the day that rising raw material costs had eaten into its margins despite more sales at higher prices.

The company's British arm Jaguar Land Rover (JLR) posted revenue of 4.4 billion pound in the first quarter, down 7.6% from the fourth quarter of FY22, impacted by supply challenges including semiconductor shortages.

It sold 78,825 vehicles in the June quarter, broadly flat compared with the fourth quarter of last fiscal and down 37% compared with the April-June period of last fiscal.

JLR's CEO Thierry Bollore said headwinds from the global semiconductor supply and COVID lockdowns in China impacted its business performance in the period under review.

"We have a completely reinforced organisation set-up to respond to the semiconductor crisis. This is now starting to recover production growth to achieve greater volumes and will allow us to take advantage of our record order book in the second quarter," he added.

Tata Motors Group CFO P B Balaji said in a conference call with reporters that the loss recorded in the quarter was due to JLR as the other two businesses -- CV (Commercial Vehicle) and PV (Passenger Vehicle) -- were making operating profit.

On a standalone basis, Tata Motors reported a net loss of Rs 181 crore, putting up a better performance from a net loss of Rs 1,321 crore in the year-ago period.

Standalone revenue from operations stood at Rs 14,874 crore as against Rs 6,577 crore in the same period a year ago, the company said.

Tata Motors Passenger Vehicles Managing Director Shailesh Chandra said it recorded the highest ever domestic passenger vehicle dispatches in the first quarter at over 130,000 units.

Electric vehicle sales grew over 440% in the first quarter as compared with the same period of previous year, he added.

"Going forward, we expect the supply side, including that of critical electronic components, to progressively improve. We continue to monitor the evolving demand and supply situation and will stay nimble to take necessary actions swiftly," Chandra noted.

Domestic commercial vehicle wholesales were at 95,895 vehicles in the first quarter, up 124% year-on-year. Exports were, however, at 5,218 vehicles, lower 23% affected by the financial crisis in few export markets, the company noted.