Jaguar Land Rover’s Indian parent posted a lower-than-expected quarterly loss as production ramp up boosted margins and revenue despite some lingering semiconductor constraints.
(Bloomberg) — Jaguar Land Rover’s Indian parent posted a lower-than-expected quarterly loss as production ramp up boosted margins and revenue despite some lingering semiconductor constraints.
Tata Motors Ltd.’s loss narrowed by 79% to 9.45 billion rupees ($116 million) for the three months ended Sept. 30, the Mumbai-based carmaker said in an exchange filing Wednesday. That was smaller than the average analyst estimate of 10.92 billion rupees loss, according to data compiled by Bloomberg.
Revenue rose 30% to 796.1 billion rupees, beating analyst forecasts. Total costs surged 25% to 824.2 billion rupees compared to the year-ago period. Other income jumped 20%, the filing said.
JLR reported a quarterly loss before tax of £173 million ($198 million) compared with a deficit of £302 million a year earlier. Its revenue surged 36% to £5.26 billion.
The earnings show how Tata Motors has managed supply snarls that have crimped output across the global car industry, which now also faces a high inflation and a probable recession. The recent virus-related lockdowns in China have also curtailed car production and dampened sales.
Tata Motors raised the price of passenger vehicles by 0.9% on average earlier this month in a bid to offset the elevated input costs and protect its margins.
“Demand for our most profitable and desired vehicles remains strong and we expect to continue to improve our performance in the second half of the year, as new agreements with semiconductor partners take effect, enabling us to build and deliver more vehicles to our clients,” Thierry Bollore, JLR’s chief executive officer, said in the post-earnings statement.
The production ramp up of New Range Rover and New Range Rover Sport improved with wholesales of 13,537 units during the quarter, up from 5,790 units in the previous quarter.
Long-Term Agreements
Jaguar Land Rover is continuing to focus on signing long-term partnership agreements with chip suppliers which is improving visibility of future chip supply, it said in the filing. Its production and sales volumes are expected to improve in the October to March 2023 period and free cashflow could approach breakeven for the full financial year, it said.
But some headwinds continue for the Indian automaker whose shares have slipped almost 10% this year while the broader market benchmark S&P BSE Sensex has climbed. The British marque’s wholesale volume of 75,307 units during the quarter missed its guidance of 90,000 units due to supply problems.
“Jaguar Land Rover’s loss of market share to peers like Mercedes, Audi and BMW may continue as the company tries to reinvent itself, impairing its ability to generate profit and reduce balance-sheet risks,” Bloomberg Intelligence analyst Joel Levington, wrote in an Oct. 6 note.
Automakers in UK have asked new Prime Minister Rishi Sunak and his government to improve the business environment after car production in the country declined 6% in September to 63,125 vehicles, roughly half of what companies produced prior to the pandemic.
(Updates with CEO comments from seventh paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
