Tata Motors Q4 takeaways: Outlook challenging, but recovery still on track

MUMBAI: left traders shocked because it reported a mammoth consolidated internet lack of over Rs 7,500 crore on account of distinctive losses associated to subsidiary Jaguar Land Rover.

The firm’s consolidated internet losses narrowed from the year-ago quarter, which was marred by Covid-related lockdowns throughout main markets corresponding to India, China and Europe.

“The business has demonstrated strong resilience in the face of adversity and its fundamentals are strong,” the corporate mentioned in its earnings assertion in a reminder to traders that it stays on the suitable track.

Here are the main takeaways from the carmaker’s March quarter earnings:
Another write-off shocker from JLR
A yr in the past, Tata Motors wrote down the worth of JLR’s stock given the ravages of the pandemic on the worldwide vehicle market. A yr later from that giant loss, the corporate determined to additional write down over $1 billion on account of cancelled fashions of the luxurious carmaker. The write down this time round is a part of the corporate’s ‘Reimagine’ technique that’s anticipated to make it a frontrunner within the luxurious electrical car market.

Topline exhibits recovery on track
Tata Motors’ consolidated revenues jumped 42 per cent and have been above analysts’ expectations, suggesting that the corporate stays on track of recovery led by the Indian operations the place gross sales greater than doubled throughout the quarter. JLR posted over 20 per cent progress, indicating the recovery in key markets like China and North America.

Outlook challenging in close to time period
Tata Motors mentioned that whereas demand stays robust, the corporate is going through challenges on the availability entrance, particularly on account of world semiconductor scarcity. “The supply situation over the next few months is likely to be adversely impacted by disruptions from Covid-19 lockdowns in India and semiconductor shortages worldwide. We expect Q1FY22 to be relatively weak due to this as well as rising commodity inflation, and expect to improve gradually from the second quarter,” the corporate mentioned.

Cash era to assuage traders

JLR delivered on its promise of producing constructive free money move quarter after quarter. The firm reported constructive free money move of 729 million pound sterling for the quarter ended March, and almost 200 million pound sterling for the monetary yr. JLR mentioned that it’s going to goal earnings earlier than curiosity and tax margin of 4 per cent in 2021-22 and break-even free money move.

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