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Tata Motors Ltd.

BSE: 500570 Sector: Auto
NSE: TATAMOTORS ISIN Code: INE155A01022
BSE 00:00 | 10 Aug 475.60 7.50
(1.60%)
OPEN

469.10

HIGH

477.20

LOW

463.50

NSE 00:00 | 10 Aug 475.55 7.30
(1.56%)
OPEN

470.00

HIGH

477.20

LOW

463.35

OPEN 469.10
PREVIOUS CLOSE 468.10
VOLUME 435763
52-Week high 536.50
52-Week low 268.50
P/E
Mkt Cap.(Rs cr) 169,624
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 469.10
CLOSE 468.10
VOLUME 435763
52-Week high 536.50
52-Week low 268.50
P/E
Mkt Cap.(Rs cr) 169,624
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tata Motors Ltd. (TATAMOTORS) - Chairman Speech

Company chairman speech

 

Emerging stronger

Tata Motors Croup is now operating as three independent business units of CommercialVehicles Passenger Vehicles and Jaguar Land Rover offering differentiated valuepropositions to their different customer segments whilst leveraging backend and corporatesynergies where possible.

Dear Shareholders

It is my privilege to write to you to present the Annual Report for FY22. I hope thisletter finds you in good health.

Recent history has been relentless with the global pandemic military conflict growinginequality supply chain shortages and more. Decades of experience has been squeezed intotwo dizzying years. Businesses have had to cope with this unprecedented sequence of eventswith speed and agility. While these changes have had a serious impact on businesses andcommunities they have also accelerated some important trends for the future viz. i)Energy transition - irreversible move to green mobility ii) Supply Chain Transition -rebalancing of supply chains to become resilient iii) Digital transition - ArtificialIntelligence and Machine Learning becoming mainstream and iv) Talent transition - comingof age of the Talent Cloud - a diverse inclusive global talent pool that can be accessedremotely.

FY22 was a busy year for your Company as it navigated these challenges to successfullystrengthen the fundamentals of the business. Global wholesales increased by 20% to1086734 vehicles and revenues stood at ?278454 crore 11.5% higher as compared to FY21.EBIT margin stood at 0.7% 190 bps lower as compared to FY21 due to impact of commodityinflation and semiconductor shortages although we saw a sequential recovery.

Free cash flow (automotive) in the year was negative at ?9472 crore (as compared topositive ?5317 crore in FY21) primarily due to adverse working capital. The businessshowed strong sequential recovery with positive free cash flow (automotive) of ^ 11916crore in H2 of FY22.

Despite the margins being impacted by supply chain issues and runaway commodityinflation our India business ended with strong free cash flows of ?1879 crore. We arecommitted to restoring the profitability of this business as it returns to competitivegrowth and inflation stabilises.

Tata Motors Group is now operating as three independent business units of CommercialVehicles Passenger Vehicles and Jaguar Land Rover offering differentiated valuepropositions to their different customer segments whilst leveraging backend and corporatesynergies where possible. This has made Tata Motors lean nimble and customer centric.Each of these businesses are self-sustaining which gives me the confidence that we willget to near zero net automotive debt by FY24.

Commercial Vehicles: In Commercial Vehicles our offerings of smart future readymobility solutions with the lowest TCO (Total Cost of Ownership) have been well received.We launched over 80 new products and 120 variants across segments to cater to theevolving needs of seamless cargo and people transport across sub segments andapplications. We gained domestic market share in all segments vs FY21 - M&HCV to 58.2%(+10 bps) ILCV to 49.0% (+310 bps) Buses and Vans to 44.8% (+420 bps) and turned aroundSCV to 39.1% (+160 bps) to record a consolidated 44.9% (+250 bps). The CommercialVehicles segment volumes grew by 37% in FY22 revenues grew by 58% while EBIT marginsimproved by modest 130 bps affected by the sharp commodity inflation.

Passenger and Electric Vehicles: The Passenger Vehicles segment was once again thestandout performer during the year. Preference for our 'New Forever' range of vehiclescontinues to rise and we introduced over 25 new products and variants to lead in thefastest growing market segments. Our "Reimagine PV" strategy to rejuvenate thefront-end sales system dealership network and customer experience is deliveringexcellent results. PV recorded its highest ever domestic annual sales of 370354 units inFY22. Overall domestic market share increased to 12.1% (+390 bps vs FY21) and further to13.4% in Q4 FY22.

The Passenger Vehicles segment grew volumes by 67% revenues by 90% and EBIT marginsimproved by 750 bps with positive free cash flows in FY22. In Electric Vehicles newrecords were set every quarter to register the highest ever annual EV sales of 19105units in FY22 (up 353% vs FY21) with penetrations touching 7.4% by Q4 FY22.

During FY22 we operationalised two subsidiaries: Tata Motors Passenger Vehicles Ltd tofocus on passenger vehicles powered by 1C engines and Tata Passenger Electric MobilityLimited to focus on accelerating the passenger EV business and its enabling ecosystem. Weentered into a definitive agreement with TPG Rise Climate for them to invest ?7500 crore($1.0B) in the passenger EV business to secure a 11% - 15% shareholding in this business.

Jaguar Land Rover: Jaguar Land Rover has embarked on the "Reimagine"journey to embrace an "electric future" and transform into a digitally-savvymodern luxury business delivering strong financial results.

During the year we saw the successful global launch of the award-winning New RangeRover while customer deliveries of the Land Rover Defender continued across 94 marketswith 107208 units sold by the end of FY22.

The global shortage of semiconductors had a disproportionately adverse impact on JaguarLand Rover's production and sales compared to our competitors.

Even though we took various steps to address the issue the situation continues toremain challenging. This is a key issue facing Jaguar Land Rover and we are workingassiduously to address the same during FY23. This should aid a gradual recovery inperformance through the year.

The Company delivered a resilient performance during the year despite a fall inrevenues by reducing its breakeven to 320000 units. While production and sales remainedsignificantly constrained the business continued to see strong demand for its productswith global retail orders at record levels thanks to strong demand for Defender and NewRange Rover.

Revenue fell 7% to ?18.3 billion whilst the Company's EBIT margins fell to negative0.4 % with lower volumes impacting working capital in the first half of the financialyear resulting in a free cash outflow of ?1.2 billion.

Retail sales declined 14% for the year.

Looking beyond the near-term challenges outlined above Jaguar Land Rover is in astrong position with a portfolio of attractive premium luxury products a healthy customerorder bank low break-evens and the right future ready strategy to support itsdistinctive and renowned British brands in a rapidly changing legislative and commerciallandscape.

Sustainability: Our roadmap to Net Zero

The shift to sustainable mobility is irreversible and the Tata Motors Group will beamongst the leaders of green mobility globally as we target Net Zero emissions (Scope 1 2and 3) by 2039 for Jaguar Land Rover 2040 for PVs and 2045 for CV and actions are alreadyunderway to deliver the same.

Jaguar Land Rover: The Jaguar brand will become fully electric by 2025 and LandRover shall have 6 BEVs by 2026. 60% of Jaguar Land Rover's volumes will be pure BEVvehicles by 2030.

Passenger Vehicles: In India EV penetration in our portfolio is likely to increasefurther to 25% in 5 years from 7.4% as of Q4 FY22. By 2025 Tata Motors will have 10 EVs.The unveil of the long range "Nexon EV Max" showcase of "CURVV"Electric SUV concept and the unveil of the "AVINYA" concept a pure EV based onGEN3 architecture show the exciting possibilities ahead of us.

Commercial Vehicles: We launched ACE EV the last mile connectivity vehicle thatgarnered 39000 orders on the day of the launch from marquee e-commerce customers.

"Tata UniEVerse": As a Tata Group we will proactively set up thecharging infrastructure across the country. The Group is also actively exploringpartnerships in battery cell manufacturing in India and Europe to secure our EV supplychain.

In summary: Tata Motors is taking concerted actions to be future ready and create avirtuous cycle of growth and returns for our shareholders. I would like to welcome you onthis journey. While the near-term outlook is fluid with multiple challenges that Ioutlined above the business is taking the right actions to navigate them and I amconfident that we will emerge stronger.

I would like to take this opportunity to thank all our employees for their immensecontributions in these trying times. I would also like to thank you shareholders for yourcontinued trust and support.

Best regards

N Chandrasekaran

.