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Tata Motors Q1FY22 Consolidated Highlights - Tata Motors Company Fundamentals | Invest Yadnya

Tata Motors Q1FY22 Consolidated Highlights

Published on 28 July 2021 Views 76 Comments 0

  • The volumes of Tata Motors company fundamentals in Q1FY22 stood at 213.6k units, a growth of 132.6% from Q1FY21 units of 91.8k. The units in this quarter declined by 36% when compared to Q4FY21 units of 334.2k.

  • The revenue of Tata Motors stock analysis  in this quarter stood at Rs. 66,406 crores, a YoY growth of 107.6% but a QoQ decline of 25% of the Tata Motors Ltd. stock.

  • Operating profit decreased by 351.8% YoY at Rs. 5,824 crores in Q1FY22, but declined by (58.6%) on QoQ basis.

  • EBITDA margin stood at 8.8% in Q1FY22, a growth of 480bps YoY and decline of (-710bps) QoQ.

  • The company posted a loss of Rs. 4,451 crores in Q1FY22 according to Tata Motors business analyst.

  • FCF of Tata Motors company analysis was -18.2k crore. The cash in Tata Motors company Profile outflow was mostly due to working capital unwinding.

  • YoY numbers of Tata Motors share analysis look good due to lower base in Q1FY21.

  • Operating leverage of Tata Motors stock price history decreased as volumes came down in this quarter

  • EBIT margin according to the Tata Motors ltd chart improved in JLR, TML and Tata Motors Finance when compared to Q1FY21.

  • Wholesale volumes of Tata Motors ltd share price were most impacted in this quarter as compared to the Tata Motors ltd share price history and there is currently a thin pipeline in wholesale and retail.

Tata Motors Standalone Q1FY22 results

  • Revenue of Tata Motors company share price from operations stood at Rs. 11,904 crores. A growth of 343% YoY and a decline of (40.6%) QoQ.

  • Operating profit turned positive in Q1FY22 and stood at Rs. 291 crores when compared to Q1FY21. Operating profit declined by (28.1%) QoQ.

  • Operating profit margin stood at 2.4% in Q1FY21, a decline of (570 bps) when compared to operating profit margin of 8.1% in Q4FY21.

  • The company recorded a standalone loss of Rs. (1,321) crores in Q1FY22 as compared to Profit after tax of Rs. 1,646 crores in Q4FY21.

JLR Highlights

  • Units sold in retail stood at 124.5k units. Retail units sold increased by 68% YoY in Q1FY22. The retail units also saw a small increase as compared to Q4FY21.

  • Wholesale units were constrained by 30k units due to semi-conductor shortages, yet they are up by 73% YoY.

  • The company had a record order bank of 110k units on 30th June 2021. This order book comprises 29k orders for Defender.

  • Q1 retail volumes higher than Q4. This reinforces the retail presence level of JLR in the marketplace.

  • As the revenue for the JLR is from wholesale and not retail the low volumes in wholesale had an impact on revenue in Q1FY22. This impact will also continue in Q2FY22.

  • EBITDA margin stood at 9% in Q1FY22. A reduction of (630bps) QoQ and increase of 540bps YoY.

  • FCF in Q1FY22 was (-996) million pounds. Investments of 571 million pounds were made during the year.

  • Cash outflow majorly during this quarter was in working capital as the company currently is building less cars and hence their payables for this quarter were lower. As soon as the company builds more cars, the working capital number will reverse which also happened in the previous year.

  • Q1FY22 investments of 571 million pounds majorly consisted of R&D and capital investments.

  • Total cash stands at 3.7 billion pounds and liquidity of 5.7 billion pounds on 30th June 2021

  • As JLR and retail inventories are falling, we will see a fall in sales in Q2FY22.

  • Peak selling period in China is from early part of Nov to early part of Feb. After Chinese new year, Feb and Mar are always lower sales than Dec and Jan. China volumes will reduce in Q2 because of the supply challenges of the semiconductor issues.

  • PBT before exceptional items was (-110) million pounds which happened due to reduced wholesales volumes and supply constraint

  • Richer mix in this quarter as compared to the previous one.

  • The portfolio in Q1FY22 was less compliant to the emissions due to the shortage of semiconductor chips which led to manufacturing of the same. The Q2FY22 is expected to be more compliant to the emissions due to a bank book of 1,10,000 units.

  • 7000 units WIP of inventory at the end of June. Normally it is 3000 units.

  • The Refocus programme introduced by the company will improve the business performance of 7 pillars: Quality, Programme Delivery & Performance, Delivered cost per car, End-to-End supply chain, Customer & Market Performance, China, Agile Organisation & Culture, Responsible Spend and Using Data & Technology.

Regional performance of JLR

  • The retail units sold in UK stood at 23.7k in Q1FY22, a growth of 187% YoY

  • North America contributed 31.4k units in Q1FY22, a growth of 51%.

  • 25.8k units were sold in Europe in Q1FY22, a growth of 174% YoY.

  • Volumes in China increased by 14% YoY in Q1FY22 and stood at 27k units despite the supply chain constraint.

  • Overseas volumes stood at 16.6k units, a growth of 71%.

  • Overall the total growth in volumes was 68% YoY in Q1FY22 and volumes stood at 124.5k units.

JLR Retail performance by Model performances

  • The Range Rover units stood at 59.1k in Q1FY22, a growth of 56% YoY as compared to Q1FY21 volumes of 38k units

  • Defender saw huge spike in volumes as it stood at 17.2k units in Q1FY22, posting a high growth of 688%.

  • As compared to other models, Discovery posted a volume growth of 26% in Q1FY22 YoY with retail units at 19.1k.

  • Jaguar increased by 55% YoY while retail units sold stood at 29.2k.

  • EVs contributed 66% to the vehicle mix of Q1FY22.

Semiconductor issues

  • Production was impacted by the shortage of semiconductors. This resulted in supply constraints and tier 2 suppliers getting affected.

  • Q1 wholesale units were up 73%. This is 23% lower than what company expected and were impacted due to supply constraints.

  • Company expects that semiconductor supply will decline further in Q2FY22 which will lead to wholesale units reducing by 50% from planned levels to 65k units.

  • Company is following up with suppliers and manufacturers of semiconductors to maximise suppliers.

  • The company is also prioritising higher margin models.

  • The company is optimising product specifications due to which they will have reduced dependency on semiconductors.

JLR Outlook

  • The company aims to reach a revenue of more than 30 billion pounds in FY26, EBIT margin of more than or equal to 10% while also keeping free cash flow positive.

  • These targets were supported by a good performance of the company in H2FY21, where it reached revenue of 12.5 billion pounds, 6% EBIT margin and 1.3 billion pounds of free cash flow.

Tata Motors Standalone Performance Highlights

Commercial Vehicles

 

  • Market share in commercial vehicles has been in a decreasing trend. The market share for Q1FY22 stood at 40.5%. In FY21 the same was 42.4%. FY19 and FY20 had 45.1% and 43% market share respectively.

  • SCV and Buses are clearly in a declining trend in market share.

  • ILCV has increased its market share to 52% in Q1FY21

  • MHCV market share is on a rise continuously from the previous 2 years as it is currently at a high of 63%.

  • Month of April started with the second wave of COVID. Volumes dropped by 50% in the month of April. In May, there was another drop of 50%. Mar to May overall volumes almost dropped by 75%. In June, volumes grew 94% over May. Volumes in June changed back to April level.

  • Overall, wholesale Q1FY22 volumes were 56% lower than Q4FY21. Volumes were 4.5x when compared to previous Q1. Localised lockdowns enabled the economy to continue to grow in different regions.

  • The wholesale volume for Q1FY22 stood at 49.5k units among which exports were 6.7%. Although volume show a growth of 362.5% YoY, they actually have declined by (55.6%) QoQ.

  • The inflationary pressures of steel and precious price rise continues.

  • The company took a price increase on 1st April which was about 2.5% across the range and another price increase of around 1%-2.5% starting 1st July was announced.

  • Rise in steel prices led to the two price increases taken by the company.

  • The company said that it is not easy to pass on the cost increase. Hence, focus has been to look  at cost reduction first and then look at the price increase in the market.

  • Due to increase in prices of diesel and gasoline, CNG penetration has increased. CNG infrastructure is also improving in many areas.

  • The index of transporter’s sentiment dropped in Q1. The outlook though, is positive as the restriction of lockdowns ease,

  • Transporter profitability is below Q4FY21 levels. Although freight rates are rising now, they are still below their Mar-21 levels.

  • Semiconductor availability is a concern for commercial vehicles too.

  • CV passenger demand was muted during this quarter.

  • Aligning production to retail hence vehicle level inventory is not required.

Commercial Vehicle Financials

  • The revenue for the commercial vehicle segment stood at Rs. 6.5k crores, a growth of 355% YoY but a decline of (-51.1%) QoQ.

  • EBITDA margin stood at a meagre 0.1%, though it was 9.1% in Q4FY21. EBITDA margin was negative in Q1FY21.

  • The margins are low due to lower operating leverage.

Passenger Vehicle

  • Wholesale volumes stood at 64.6k units, a growth of 343.2% YoY but a decline of (23.3%). Close to 200 units were exports during this quarter

  • Passenger vehicle market share increased to 10% in Q1FY22. These levels were seen for the first time in 10 years. In FY21 it was 8.2% and FY20 it was 4.8%.

  • The industry grew by 320% YoY in Q1FY22 where Tata motors passenger vehicles grew 343% and electric vehicles grew 423% during the same period.

  • The EV mix has improved to 3% of the total passenger volume in Q1FY22. In FY20 it was only 0.2%. The company posted the highest ever quarterly sale of EVs at 1,715 units. The market share of EV has increased to 77% in Q1FY22 as compared to 61.7% in Q1FY21.

  • The company is working closely with Tata Power to develop the charging infrastructure. Current EV order book in India: between 14-16 weeks. This will reduce as supply increases.

  • The company plans to launch 10 new EVs by 2025 which will be spread across models. It has also integrated back end to ensure security of supply.

  • Power train mix for Q1FY22 was as follows, EV:3%. Diesel:23% and Petrol:75%.

  • The strong response for Nexon, Harrier and Safari led to market share gain of 800bps in mid-size SUVs.

  • Nexon, Tiago and Altroz hold 2nd rank in their respective segments.

  • The company is taking actions as it has identified micro-markets for demand recovery.

  • The company also has launched dark edition models.

  • The company is mitigating semiconductor supply challenges by creating alternatives.

  • Inventory is consciously built up to ensure the upcoming demand is not disrupted due to shortage of semiconductors.

  • The company took a price increase in May of about 1.8%. Yet to take price increase in Q2.

  • Pune & Sanand plants operating at 65%-70% capacity. Ranjangaon capacity utilisation would be close to 90%. Engine & Transmission which is powertrain capacity utilization would be upwards of 90%.

Passenger Vehicle Financials

  • Revenue in Q1FY22 stood at 5.3k crores, a growth of 335.7% YoY, but a decline of 24.5% QoQ.

  • The EBITDA margin improved to 4.1% in Q1FY22 as compared to (-16%) in Q1FY21. The margin shrunk by 80bps as it was 4.9% in Q4FY21.

Tata Motors Finance

  • The PBT stood at Rs. (-471) crores in Q1FY22 as compared to Rs. 122 crores in Q1FY21.

  • The AUM has increased to Rs. 41,431 crores in Q1FY22 as compared to Rs. 37,274 crores in Q1FY21

  • Disbursals have increased by 216% YoY due to low base. It has dropped by 69% QoQ due to lockdowns in multiple states.

  • Collections have been impacted due to second wave of covid which ultimately resulted in higher NPAs

  • The GNPA stood at 12.3% as compared to 5.3% YoY. NNPA stood at 9.6% as compared to 4.3% YoY.

  • More than 95% of people are vaccinated. This should improve collection efficiency and the company sees it coming back in July.

  • Cost to income ratio has improved to 39% which was 49% in previous year.

  • The company has good liquidity with cash and cash equivalents amounting upto Rs. 7.4k crore.

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