NEW DELHI: Disruption at Jaguar Land Rover (JLR) continues to drag Tata Motors. The country’s largest vehicle manufacturer by revenue on Monday reported consolidated net loss of Rs 4,451 crore for the quarter ending June 30 (Q1) FY22, as production operations at JLR, Tata’s British subsidiary, took a big hit due to a global shortage in supply of semiconductors.
While the company’s net loss fell around half from Rs 8,443.98 crore (loss) it had reported in the pandemic struck quarter a year back (Q1FY21), it was way higher than what the street had estimated. Analysts as well as brokerage houses were estimating Tata Motors to report Rs 1,500-2,000 crore negative PAT during Q1FY22.
JLR’s wholesales during the quarter were 30,000 units lower than planned due to the semiconductor issue even as JLR retail sales were at 124,537 vehicles, up 68.1% year-on-year. The production constraint resulted in a pre-tax loss of £110 million with an EBIT (earning before interest and tax) margin of 0.9% and a free cash outflow of £996 million. The cash outflow is after £571m of investment spending and unfavourable working capital of £800 million related to the lower production, the company informed.
Earlier in the month, JLR had reported that global shortage in semi-conductor chips will lead to a 50% decline in production during the September quarter. This announcement had a drastic impact on Tata Motors’s share prices which have fallen around 20% since then with no signs of recovery. JLR now expects semiconductor supply shortages in the second quarter ended September 30, 2021 to be greater than in the first quarter. In the second quarter, it expects a negative EBIT margin with a free cash outflow of less than £1 billion.
Thierry Bolloré, Jaguar Land Rover Chief Executive Officer, said, “Though the current environment continues to remain challenging, we will continue to adapt and manage elements that are within our control and ensure that Jaguar Land Rover is well-placed to respond to any further market developments.”
The Indian operations remained strong during the quarter despite the second Covid-19 wave. Sales in the quarter rose 343% y-o-y to Rs 11,904 crore.