New Delhi Domestic automaker Tata Motors on Thursday said it has reduced its losses 1,033 crore in the quarter ended March, compared to the year-ago period in which it posted a net loss of 7,605 crore. Higher commodity costs, lower wholesales at its UK-headquartered subsidiary Jaguar Land Rover (JLR) and global chip shortages affected the company’s performance. A one-time extraordinary fee of £43 million for the loss of sales that JLR suffered in Russia also contributed to the net loss. Sales in Russia account for 2.5% of JLR’s total volume.
The automaker reported an 11.5% decline in year-on-year (yoy) revenue in the March quarter, at 78,439 crores.
The company saw gradual improvement in all its business segments including JLR, Domestic Passenger Vehicle (PV).
The EVs, and commercial vehicle (CV) businesses, however, highlighted that inflationary pressures arising from the fresh Covid-19 related lockdowns in China and disruption in the supply chain, will likely play poorly in the first quarter of the current fiscal.
“Many parts of China are under lockdown as we speak because of the zero-Covid policy of the Chinese government. Due to this the supply chain has been affected. We need to take action on a consistent basis in terms of availability of supplies from China this year, Tata Motors Group Chief Financial Officer PB Balaji told reporters on a conference call.
The auto major maintained a cautious approach on the back of a model change for the Range Rover Sport for Q1FY23 as well, which could limit the improvement in volumes and result in negative cash flow in the current quarter. But for the full fiscal year 2013, Tata Motors expects to deliver £1 billion in free cash flow based on a “conservative plan” in the form of improving semiconductor supply and production.
“We expect demand to remain strong despite geopolitical concerns and inflation. The supply situation is easing, although there are concerns that we have COVID in China. Commodity inflation is likely to remain high and we need to prepare for it.”