TATA Motors (In Cr.) 4QFY20 3QFY20 4QFY19 QoQ % YoY%
Revenue 62493 71676 86433 -12.8% -27.7%
EBITDA 691 7197 8019 -90.4% -91.4%
EBITDA Margin (%) 1.1% 10.0% 9.3% (890) bps (820) bps
Net Profit -9864 1756 1109 -661.7% -989.4%
Net Profit Margin (%) -15.8% 2.4% 1.3%
JLR: Key performance Indicator 4QFY20 3QFY20 4QFY19 3QFY19 FY2019
NET Debt (IFRS) 2220 2177 736 2213 736
CFO 991 748 2121 659 2543
Capex 766 892 729 1020 3810
FCF 225 -144 1392 -361 -1267

Result Highlight:

  • TATA motors 4QFY20 performance fully reflects the impact of COVID-19 in JLR’s key market,

  • Tata Motors is reviewing all its businesses and would consider exiting those that do not add strategic value, as part of a broader effort to save ₹6,000 crore in its domestic business in

  • Tata Motors net loss narrows to Rs 12,071 crore in FY20; JLR posts loss at 501 million pound in March quarter.

  • Both JLR and India Tata Motors report a loss and Negative free cash flow for both

  • The management is focusing only on product development and avoiding expansionary capex, which will result in minimal impact on free cash

  • Tata Motors’ India business equity infusion between FY15-FY22CL (Rs 13900 cr.) will exceed the growth in its net worth over the same

  • The increase in leverage is already starting to impact Tata Motors as it recently cancelled a Rs10bn debenture issue on account of the higher interest

  • JLR’s operating performance was adversely impacted by lower sales from China and higher VME, which hurt realizations (-6.5% QoQ).

  • JLR and the India business efforts are focused on turning FCF positiven during 2Q–4QFY21 and FCF positive for the full year

  • The new Defender has 22k orders, and deliveries have been started in a phased manner from May’20

Management commentary:

  • Outlook for JLR remains uncertain but seeing recovery in terms of cash

  • Free cash flow for JLR for the quarter ending June is seen less than 2 billion pounds in

  • Actions are underway to significantly deleverage the group with JLR to become sustainably cash positive from

  • Outlook for JLR remains uncertain but seeing recovery in terms of cash

  • Cash breakeven levels for FY21 would be significantly lower than current levels of 500k

  • 84% of JLR’s retail network is operational. All plants are operational except Castle Bromwich as inventory at this plant was at higher

  • Other global markets have seen recovery in May (over April) and expect June to be better than May.

  • JLR’s realizations and gross margins declined due to: a) lower contribution from China and b) higher VME (220bp impact).

  • At the Tata motors level, the focus is on cutting capex and cost and improving liquidity. Efforts are ongoing to turn FCF positive in both JLR and India between 2Q–

  • Furthermore, an increase was reported in the cash generation target under project charge+ to GBP 5 billion (from GBP 4 billio in 3Q v/s GBP 2.5 billion in 2Q). This implies an additional GBP1.5b for FY21 (v/s GBP3.5b delivered up to Mar’20). This would be achieved by reducing capex and inventory and improving operating performance.


Tata Motors’ net loss stood at Rs 9,894.2 crore in the three months ended March compared with a profit of Rs 1,117 crore a year ago, as a lockdowns to contain the corona virus pandemic across its markets ravaged sales. That included a Rs 2,549-crore provision for impairment in  its  passenger  vehicles  business,  onerous  contracts  and  subsidiaries.  Tata Motors’ India business equity infusion between FY15-FY22CL (Rs 13900 cr) will exceed the growth in its net worth over the same period. In future equity infusions are also likely to be utilised for loss funding and hence we do not attribute any equity value to its India business. Cut in capex should reduce negative free cash flow in near term. There  is a need to deleverage India business via strategic sale in India passenger vehicle segment or via an equity dilution. JLR may not benefit as much as other original equipment makers as global auto stimulus is more focused on electric vehicles. The company’s ability to sustainably claw back domestic market share (across vehicle classes) remains a key monitorable.


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