Tata Motors Q2 results: Losses widen but performance better than Street estimates

MUMBAI: Tata Motors’ losses widened year-on-year during the September-ending second quarter as sales continued to remain lower than the previous year, but the company performed better than market expectations on the back of cost savings and deferred tax credit.

The Mumbai-based automaker reported a loss of Rs 307 crore during the second quarter as compared to a loss of Rs 188 crore during the corresponding quarter last year. Revenue declined 18 per cent year-on-year to Rs 53,530 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 13 per cent to Rs 6,098 crore.

The company reported a pre-tax loss of Rs 815 crore, in line with street estimates. A deferred tax credit of Rs 1,222 crore narrowed the loss after taxes.

Jaguar Land Rover, which accounts for about 80 per cent of the company’s revenue, returned to profitability with a pre-tax profit of £65 million. Revenue declined by 29 per cent for the British carmaker to £4,352 million, according to a press note from Tata Motors.

Tata Motors’ standalone business in India reported a 3.3 per cent decline in revenue to Rs 9,668 crore. Pre-tax loss stood at Rs 1,212 crore.

Consolidated EBITDA margin deteriorated by 160 basis points to 10.5 per cent, led by a 230-basis-point decline in JLR’s margins. The standalone business reported a 480-basis-point improvement in EBITDA margin to 2.6 per cent.

Sales declined by 11.9 per cent YoY for JLR, while the India business reported a 56 per cent decline in commercial vehicles sales and a massive 73 per cent improvement in passenger vehicle sales.