Tata Motors Ltd consolidated net loss of Rs26,992cr in Q3FY19, vs net profit of Rs1,199cr in Q3FY18 : Misses Estimates

The company’s consolidated revenue stood at Rs77,001cr, up 5% yoy and 7% qoq.

Feb 07, 2019 05:02 IST India Infoline Research Team

Tata Motors Ltd Q3FY19

Consolidated Results Q3FY19: (Rs. in cr)

Q3FY19 YoY (%)
Revenue 77,000.89 5.0
EBITDA 6,040.64 [22.1]
EBITDA Margin (%) 7.8 [272]
Net Loss (reported) 26,992.34 NA
***EBITDA margin change is bps

Tata Motors Limited (TML) missed expectations yet again in Q3FY19 at the consolidated level. Consolidated revenue was up 5% yoy (up 7% qoq), lower than expectation of Rs78,554cr. Higher expenses related to R&D and regulations led to a 22% yoy decline (11% qoq decline) in consolidated EBITDA to Rs6,041cr. EBITDA margin came in at 7.8%, contraction of 272bps yoy (contraction of 153bps qoq). The company plunged into a net consolidated loss due to asset impairment in JLR of Rs27,838cr. Reported consolidated net loss was Rs26,992cr against net profit of Rs1,193cr in Q3FY18 and net loss of Rs1,049cr in Q2FY19.

Other Highlights

  • Standalone performance was better than expectation with revenue and EBITDA increasing 2% yoy and 13% yoy respectively. EBITDA margin expanded 80bps yoy to 8.1%. Cost reduction measures and efficient raw material expenses led to an improvement in standalone operating performance. This was only the second time in more than 20 quarters that standalone EBITDA margin exceeded 8%.
  • JLR performance was lower than expectation at all three fronts – revenue, EBITDA and PAT. Weak volumes (down 6% yoy, up 11% qoq) led to 1% yoy drop in top-line to GBP6,223mn. Given the muted demand scenario, JLR adjusted downwards, the carrying value of capitalized investments, resulting in a non-cash pre-tax exceptional charge of GBP3.1bn and an overall pre-tax loss of GBP3.4bn for Q3FY19.
  • JLR’s recent announcement of reducing its global workforce by 4,500 people is expected to result in a one-time exceptional redundancy cost of ~GBP200mn.

Technical View:

Tata Motors Ltd ended at Rs. 182.90, up by 4.7 points or 2.64% from its previous closing of Rs. 178.20 on the BSE.
The scrip opened at Rs. 179.45 and touched a high and low of Rs. 184.95 and Rs. 179 respectively. A total of 1,75,44,486 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.

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