In a surprising turn of events, Tata Motors Ltd, India's largest auto manufacturing company by sales, has reported a quarterly loss due to its muted sales of Jaguar Land Rover (JLR). In a regulatory filing, the company reported that it posted a loss of ₹1,862.57 crore in the first quarter of the financial year 2019 as against a profit of ₹3,199.93 crore last year during the same period. It was the company's first quarterly loss in three years and worst since the December quarter of 2008 where it had incurred a loss of ₹2,598.83 crore.
Mint has reported that the loss is attributed to the snail paced sales in China which is JLR's biggest and most profitable markets. The Chinese government has announced a reduction in import taxes from July 1, which had made the consumer of the world's largest automobile market defer purchase during the quarter ended in June.
The global sales of the Jaguar F-Pace and Range Rover Evoque sport-utility vehicles spiked 5.8 per cent as compared to last year's 145,510 vehicles in the last quarter. The automobile major missed the analyst prediction of 10 per cent earnings as it registered earnings before interest, tax, depreciation and amortisation margin of 6.2% during the first quarter of the current fiscal year.
Tata Motors, however, has given multiple reasons that could have led to the quarterly loss. According to the company, the profitability was hit due to lower operating leverage, higher discounts in the US, UK and China, foreign currency fluctuations, and higher depreciation and amortisation costs.
On the contrary, the company has managed to perform better in its Indian market. The domestic operations made a net profit of ₹1,187.65 crore in the June quarter as against the year-earlier loss of ₹463.14 crore. The commercial and passenger vehicle sales rose by 63% to ₹16,592.33 crore, albeit off a lower base. The net realisations improved with higher sales of bigger trucks and buses helping the Ebitda margin widening 8.9 percentage points to 8.3%. In the June quarter, total domestic sales increased 64% y-o-y basis to 164,579 vehicles.
