Revenue for the quarter declined 11.5 per cent year-on-year (YoY) to Rs 78,439 crore from Rs 88,627.90 crore in the corresponding quarter last year, the company said in a BSE filing.
Ebitda margin for the quarter came in at 11.2 per cent, down 320 basis points. Ebit margin at 3.2 per cent fell 410 basis points, the Tata group firm said.
Tata Motors said the demand remains strong despite geopolitical and inflation concerns. The supply situation is gradually improving, whereas commodity inflation is likely to remain at an elevated level, it added.
“We expect performance to improve through the year as China Covid and semiconductor supply issues improve, we and aim to deliver strong EBIT improvement and free cash flows in FY23 to get to near net auto debt-free by FY2024,” it said.
Among its segments, Jaguar Land Rover (JLR) posted revenue of £4.8 billion in the March quarter, up 1 per cent sequentially, reflecting higher wholesales offset partially by the impact of the runout of the previous generation Range Rover, with the new Range Rover still ramping up. The EBIT margin for the segment was at 2 per cent. Free cashflow for the business improved to £340 million, up from £164 million in Q3.
In the case of commercial vehicles, the business continued to show strong sequential recovery led by MHCV segment, Tata Motors said. The business clocked its highest quarterly revenues since Q4FY19 and grew market shares in all segments.
“Despite lower margins due to commodity inflation, impact was lower on PBT (bei) of Rs 607 crores in Q4 due to operating leverage from higher revenues,” it said.
In the case of passenger vehicles, the business delivered a comprehensive turnaround in Q4FY22 with the highest quarterly revenues of Rs 10,500 crore (up 62 per cent), positive EBIT of 1.2 per cent and positive free cash flows, Tata Motors said. EV volumes rose to 9,100 units in Q4 and PV market share improved to 13.4 per cent (up 440bps).
Robust demand for “New Forever” range and agile supply actions led to this strong performance, Tata Motors said.
Covid lockdowns in China, as well as, the new Range Rover Sport model changeover are expected to limit volume improvements in Q1, possibly resulting in negative EBIT and negative free cash flows in the quarter, Tata Motors said on JLR.
“Volumes are expected to improve progressively thereafter, and we target achieving a 5 per cent EBIT margin and £1 billion plus positive free cash flow in FY23 for the full year. Our medium and longer-term financial targets under the Reimagine Strategy, underpinned by the Refocus transformation programme, remain unchanged, including improving EBIT margins to 10 per cent or more by FY26 and improving cash flow to achieve near zero net debt in FY24,” it said.
In the CV segment, the supply situation continues to show gradual improvement, Tata Motors said.
“Despite uncertainties, business sentiment continues to be positive with increasing fleet utilization levels and freight rates. Sharp commodity inflation, however, continues to remain a challenge. The company will continue to step-up its investments in products and new business models to deliver customer value while ensuring profitable growth,” it said.
In the PV segment, Tata Motors said it will continue to drive strong sales performance whilst improving profitability and managing supply bottlenecks.
“In electric vehicles, the business will drive up penetration and accelerate sales further. The business is expected to deliver strong improvement in margins and profitability in FY23. The business will continue to step-up new product launches and enhance capacities to cater to increasing demand. Despite significant step-up in investments, the PV business is expected to remain self-sustaining whilst the EV business investments are well funded with the capital infusion,” Tata Motors said.