Tata Motors Result: Q3 net profit surges 67% to ₹2,906 cr

Tata Motors Ltd on Friday posted a 67.2% surge in profit for the December quarter. It reported a consolidated net profit of ₹2,906 crores for the third quarter, compared with a profit of ₹1,738 crores a year earlier. The automaker reported a loss of ₹314 crores in the previous quarter as the Covid-19 pandemic hit business in several of its key markets.

Overview

The quarter, for Jaguar Land Rover, reflected a strong sequential recovery in retails in all the markets; except the UK where the Q3 remained seasonally lower. The business achieved 6.7% EBIT margin and strong positive free cash flows of £0.6b. This reflected the recovery in sales, favourable mix and Charge+ delivery. Charge+ delivered £0.4b of savings in the quarter and £2.2b years to date.

India operations of the Tata Motors limited continued its strong growth in the quarter with CV witnessing a sequential recovery and PV witnessing continued strong growth of its "NEW FOREVER" portfolio. PV absolute EBITDA is the highest in the last 10 quarters. CV profitability improved sequentially due to a better mix (higher MHCV & ILCVs) and ongoing cost savings. The business generated strong positive free cash flows led by the cash savings initiatives which yielded 2.6KC in the quarter and 5.1KCr year to date.

From the leaders

According to Guenter Butschek, chief executive officer and managing director at Tata Motors, the company improved its financial and operational performance by reducing costs and generating free cash flow. It is on track to achieve its target savings of Rs 6,000 crore.

As for the future outlook, the company, in its release states, “Despite continued pandemic related uncertainties, supply bottlenecks and commodity inflation, we expect to consolidate our gains and end the fiscal year on a strong note. We remain committed to consistent, competitive, cash accretive growth and deleverage the business through the focused execution of our strategy in all our businesses.”