Homegrown auto major Tata Motors on Monday reported a consolidated net loss of ₹1516 crore for the quarter ended December 2021, narrower than a net loss of ₹2906 crore in the same quarter last financial year. The automaker had reported a wider than expected net loss of over ₹4400 crore in the last quarter.
Net revenues for Tata Motors’s standalone business were up 15.4% to ₹20,959 crore on a sequential basis in this quarter, due to a 16.5% growth in sales volumes of its passenger cars & commercial vehicles to 200212 units compared to 153480 units the quarter before. Retail sales of Jaguar Land Rover, Tata Motors’ UK-headquartered luxury car subsidiary, fell by almost 38% to 80,126 vehicles year-on-year, with production significantly constrained by a lack of semi-conductor supplies, Tata Motors said.
Automakers have been grappling with several supply chain bottlenecks for over a year now, including a shortage of semi-conductors, electronics parts, and EV batteries, all of which have contributed to demand far outstripping demand for passenger vehicles.
“The chip supply situation is gradually improving with production volumes of 72,184 units (in JLR) up 41% over Q2 FY22 and wholesales of 69,182 units up 8% on Q2 FY22", the automaker noted.
Tata Motors said that although its domestic operations had shown significant revenue improvement, margins were adversely impacted because of high commodity price inflation. The automaker’s India business reported a negative EBIT of 1.7% and pre-tax loss (before exceptional items) of ₹800 crore for the third quarter.
However, the automaker said it was expecting margins to improve in the fourth quarter.
“We are confident of breaking even on our EBIT in Q4, and continued improvement beyond,", PB Balaji, Group Chief Financial Officer, Tata Motors, told reporters in a conference call.
Balaji said he expects prices of steel, which is a major raw material for the manufacture of automobiles, to remain stable in the fourth quarter, leading to better realisations and improved margins.
While Tata Motors has enough capacity to cater to the demand it’s receiving for passenger cars, Balaji said the chip shortage prevented the automaker from leveraging it fully. “We will be looking to de-bottleneck the entire supply chain", he added.
