A logo sits on the front of Tata Motors Ltd.’s new Nexon sports utility vehicle. (Photographer: Dhiraj Singh/Bloomberg)

Q1 Results: Tata Motors Posts Worst Quarterly Loss In Nine Years

Tata Motors Ltd. reported its worst loss in nearly nine years as its luxury car unit Jaguar Land Rover continues to face headwinds.

Consolidated net loss stood at Rs 1,902.4 crore in the quarter ended June as opposed to a net profit of Rs 3,199 crore in the year-ago period, said the company in an exchange filing. That’s the worst since Rs 2,599-crore loss in the three months to December 2009. Analysts tracked by Bloomberg had estimated a profit of Rs 920 crore.

Jaguar Land Rover, which contributes nearly 78 percent to Tata Motors’ revenue, remains under pressure in the U.K., incurring a loss of £210 million even as its retail sales went up by 5.9 percent to 1.45 lakh units.

The quarterly loss came amid a decline in deliveries of its sports utility vehicles F-Pace and Discovery Sport. “JLR faced multiple challenges including temporary issues like China duty impacts as well as market issues like diesel (engine) concerns in the U.K. and Europe,” N Chandrasekaran, chairman of Tata Motors and parent Tata Sons Ltd., said in a statement accompanying the earnings filing.

JLR’s Chief Executive Officer Ralf Speth said in the statement that the luxury carmaker had a pre-tax loss in the first quarter, reflecting the impact of China duty cuts as well as planned stock reduction by dealers. It expects de-stocking to continue well into the second quarter, and aims to keep its Ebit margins in the range of 4-7 percent compared with a negative 3.7 percent in three months to June.

Q1 Results: Tata Motors Posts Worst Quarterly Loss In Nine Years

On a standalone basis, the Tata Motor’s domestic reported a profit of Rs 1,188 crore in April-June compared with a loss of Rs 500 crore in the previous quarter. Revenue increased 83 percent to Rs 16,803 crore.

There could be a few challenges in the short term, particularly in the commercial vehicles’ segment as the new regulations on axle loads come into effect. But we remain positive on the long-term potential of the Indian market.
Guenter Butschek, Chief Executive Officer, Tata Motors
  • Revenue rose 14.7 percent to Rs 67,081.3 crore, missing the consensus forecast of Rs 70,900 crore.
  • Earnings before interest, tax, depreciation and amortisation increased 9 percent to Rs 5,430 crore.
  • Margin contracted 40 basis points on a yearly basis to 8.1 percent.

Shares of the automaker closed 1.3 percent lower ahead of the earnings announcement compared with a 0.5 percent gain in the Nifty Auto Index.