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Tata Motors Q3 net loss at Rs 26,961 cr on JLR woes

Press Trust of India  |  New Delhi 

Auto Thursday reported a whopping consolidated net loss of Rs 26,960.8 crore for the third quarter ended December 31, hit by one-time asset impairment in its struggling British arm

The company had registered a net profit of Rs 1,214.6 crore in the October-December quarter of 2017-18.

Total revenue from operations, however, rose 4.36 per cent to Rs 77,582.71 crore as compared to Rs 74,337.7 crore in the year-ago period, said in a regulatory filing.

On a standalone basis, the company posted PAT (profit after tax) of Rs 617.62 crore as against Rs 211.59 crore in the year-ago quarter.

Total standalone income rose to Rs 16,477.07 crore as against Rs 16,186.15 crore in the same period previous fiscal.

JLR's revenue, however, declined 1 per cent to 6.2 billion pounds.

The auto said its profit was impacted by an exceptional item of asset impairment in of Rs 27,838 crore (3.1 billion pounds).

"Given the muted demand scenario and the associated impact on the financials, has concluded that the carrying value of capitalised investments should be adjusted down, resulting in a non-cash 3.1 billion pre-tax exceptional charge and an overall pre-tax loss of 3.4 billion for the quarter," said in a statement.

Commenting on the step, said, "We are announcing a non-cash exceptional charge to reduce the book value of our capitalised investments".

The is facing significant market, technological, and regulatory headwinds. At the same time, investment in new models, electrification and other technologies remains high, he added.

N Chandrasekaran said the company's domestic business continues the strong momentum and has delivered market share gains as well as profitable growth.

"The turnaround 2.0 strategy is delivering well with a continuing portfolio of product launches, which are the requisite building blocks for sustainable growth," he added.

In JLR, the market conditions continue to be challenging particularly in China, Chandrasekaran said.

"The company has taken decisive steps to step up competitiveness, reduce the costs and improve the cash flows while continuing to invest in exciting products and leading edge technologies. With these interventions, we are building to deliver strong results in the medium term," he added.

JLR's were down 6.4 per cent to 1,44,602 units, while wholesales were down 11 per cent to 1,41,552 in the third quarter.

"The financial results mainly reflect the lower sales in and higher depreciation and amortisation of investment expense," it said.

As part of its plans to achieve 2.5 billion pounds of investment, working capital and profit improvements by March 2020, JLR announced in January that it would reduce its global workforce by 4,500 people.

"This is expected to result in a one-time exceptional redundancy cost of around 200 million pounds," it added.

On a standalone basis, Tata Motors said its profit after tax for the quarter was at Rs 618 crore as against Rs 211.59 crore in the year-ago period.

Revenue also increased by 1.5 per cent to Rs 16,208 crore, it added.

Total sales volume declined 0.5 per cent at 1,71,354 units due to challenging conditions in the domestic market, Tata Motors said.

In the domestic market M&HCV sales were down 15 per cent, while passenger vehicles were up by 3 per cent.

"Fiscal year 2019 so far has been a challenging period for the industry. Despite the muted growth, Tata Motors has delivered strong results, registered an impressive profitable growth this year on the back of exciting products, renewed brand positioning and aggressive cost reduction," Tata Motors and MD said.

Tata Motors shares Thursday settled 2.64 per cent up at Rs 182.90 on the BSE.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 07 2019. 18:15 IST