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Tata Motors reports surprise loss of Rs 7,605 cr in Q4; revenue up 42% – Business Standard

Auto major Tata Motors reported a consolidated net loss of Rs 7,605 crore for the quarter ended March 31, 2021 (Q4FY21), mainly on account of supply related challenges and global chip shortage.

Tata Motors, which owns the Jaguar Land Rover (JLR), has incurred cash write downs on assets worth Rs 9,606.1 crore. This is apart from the restructuring costs of Rs 5,388.2 crore. In total, the exceptional loss in Q4 related to JLR stood at nearly Rs 14,000 crore.

It posted a loss of Rs 9,894.2 crore in the corresponding period last year. The Covid-19 crisis has driven a shift to remote work and learning, boosting demand for laptops and other gadgets that use semiconductors. The resulting chip crunch has left suppliers struggling to adjust and forced automakers across the world to cut back production.

The carmaker’s revenue from operations came in at Rs 88,628 crore for the fourth quarter, up 42 per cent from the revenue of Rs 62,492 crore clocked in the same quarter last year.

On a standalone basis, Tata Motors reported a net profit of Rs 1,646 crore as against a loss of Rs 4,871 crore in the year-ago period.

For the full financial year 2020-21, the company reported a consolidated net loss of Rs 13,395 crore, against a net loss of Rs 11,975 crore in the previous year.

According to a consensus estimate of Bloomberg, Tata Motors was expected to report a net profit of Rs 2,774.10 crore and revenue of Rs 87,517.8 crore for the fourth quarter.

“While demand remains strong, the supply situation over the next few months is likely to be adversely impacted,” Tata Motors said in a stock exchange filing.

“We expect Q1 FY22 to be relatively weak due to this as well as rising commodity inflation and expect to improve gradually from the second quarter,” it said.

The India business reported a 106 per cent year-on-year jump in revenues to Rs 20,046 crore in the March quarter.

“The CV business consistently posted sequential quarter on quarter growth on back of improved consumer sentiments, buoyancy in e-business, firming freight rates and higher infrastructure demand including road construction and mining. We have successfully improved our operational and financial performance by reducing cost,” said Guenter Butschek, CEO and MD of Tata Motors.

Tata Motors reported an operating profit or the earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs 12.7k crore.

JLR’s EBIT margins during the March quarter increased to 7.5 per cent and 2.6 per cent for the full year.

On Tuesday, Tata Motor’s scrip rallied 3.4 per cent to close at Rs 332 on NSE.