Tata Motors Q2 results: Consolidated loss widens to Rs 4,442 crore, misses estimate; sales rise 15% YoY

However, the carmaker reported a 14.7 per cent year-on-year growth in consolidated revenue from operations to Rs. 61,378.8 crore for the reported quarter, which was sharply above Street’s estimate.

The company’s operational performance took a beating in the quarter as consolidated operating margin shrank 210 basis points on-year to 8.4 per cent owing to a sharp rise in input costs during the past year.

“Semiconductor issues and commodity inflation will continue to impact the near term and we are doing our best to manage them. The performance is expected to improve gradually starting in H2 as both the supply chain and the pandemic situation improves,” Tata Motors said.

The stellar topline performance of the company was down to a strong show from the domestic passenger vehicle and commercial vehicle business. Tata Motors India reported a 91 per cent on-year rise in revenues and a 130 bps on-year improvement in EBITDA margins to 3.9 per cent despite cost headwinds.

However, its India business reported a pre-tax loss of Rs. 800 crore for the reported quarter thanks to semiconductor shortage and higher input costs. The company said that its passenger vehicles business in India is showing strong demand whereas the CV business is gradually improving.

“During the quarter, we accelerated the sales momentum to increase market share in every segment of commercial vehicles, recorded a decade high sale in passenger vehicles and delivered the highest ever quarterly sales in electric vehicles,” said Girish Wagh, executive director at Tata Motors India.

The money-maker Jaguar Land Rover business suffered due to the shortage of semiconductors globally as sales plummeted 11.1 per cent on-year. While the chip shortage restricted JLR’s ability to take advantage of strong demand conditions, high input costs ate into eats operational performance.

JLR’s EBITDA margin in the quarter shrank 380 basis points on year to 7.3 per cent while its EBIT margin declined 500 basis points to -4.7 per cent. Overall, the luxury carmaker reported a pre-tax loss of 308 million pound sterling in the reported quarter.

To its credit, JLR still managed to generate a free cash flow of 664 million pound sterling in the September quarter as against its guidance of a 1 billion pound outflow. “This was significantly better than prior guidance for a £1 billion free cash outflow, reflecting prioritised production of higher-margin products and cost controls to reduce the cash break-even point for the company,” JLR said.

JLR said that the semi-conductor shortage situation remains dynamic but it expects some improvement in the coming quarters. The company said that it will continue to prioritise the production of high-margin products going ahead and is working with semiconductor producers to secure its supply chain.

“With strong customer demand with a record order book we are well placed to return to strong financial performance as semiconductor supply begins to improve,” said Thierry Bollore, chief executive officer at JLR.

Shares of Tata Motors ended 0.6 per cent higher at Rs. 486.4 on the National Stock Exchange.