NEW DELHI: Tata group firm Tata Motors on Wednesday registered a net loss of Rs 1,049 crore for the September quarter, disappointing the market by a margin.
International operations in particular did not go well for the auto major, but the company said it is working on a turnaround plan.
Here are top five takeaways from the companys Q2 results.
China JV numbers uninspiring
The company said its net profit from joint ventures and associates contributed Rs 86 crore to profit during the quarter as against Rs 510 crore in the year-ago quarter.
The fall, according to Tata Motors, has much to do with lower profitability in the JLRs China JV (CJLR) due to market challenges. Other income, including government grants, stood at Rs 617 crore for the quarter compared with Rs 506 crore in the same quarter a year earlier.
JLR sales lose steam
JLR revenues for the quarter dropped 1.9 per cent YoY to 5.6 billion pounds due to lower wholesales and higher depreciation and amortisation costs. Sales fell due to challenging market conditions in China where demand was adversely impacted by consumer uncertainty following import duty changes and escalating trade tensions with the US.
“In North America, demand for SUVs remained strong, but overall sales were held back by slowing orders for passenger cars. In Europe, sales were also affected by continuing weakness in diesel demand and the introduction of new WLTP homologation rules on emissions. UK sales were adversely impacted by diesel taxation and regulations, alongside continuing uncertainty related to Brexit,” the company said in a regulatory filing.
JLR Q2 investments at 1 billion pounds
JLR said production at new plant in Slovakia has started and the company continues to invest in new vehicles, next generation automotive technologies and facilities to support its future sustainable growth, with total investment of 1 billion pound for the quarter.
Turnaround plan at work
"The company has launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability," said Chairman N Chandrasekaran.
The leadership team at JLR is in mission mode to achieve the deliverables under this plan. “As we take these structural actions, we continue to remain focused on sustainable profitable growth. I am confident that Tata Motors Group is building the right business model and the requisite capabilities for delivering Competitive, Consistent and Cash Accretive Growth in the medium to long term," the company said.
JLR seen to pick up speed
The companys financial performance is expected to improve in the second half, and Jaguar Land Rover now expects pre-tax profits to break even for the full year ending March 2019. Free cash flows post this spending was negative at 624 million pound.