In the Q4 FY22 results it announced on Thursday, Tata Motors reported that its consolidated revenues from operations fell 11.5 % to INR 78,439 crore from the INR 88,628 crore it earned in the corresponding period last fiscal. Overall revenue for the company grew 11.5% YoY to INR 278,454 crore in FY22.
Compared to Q4 FY21, revenues of Tata Motors’ key constituents – Tata Commercial Vehicles (TCV) and Tata Passenger Vehicles (TPV) – reported growth to the tune of 29.3% and 62% respectively. Tata Commercial Vehicles, which had reported revenues of INR 14,334 crore in Q4 FY21, reported revenues of INR 18,529 crore in Q4 FY22. Revenues of Tata Passenger Vehicles, meanwhile grew from INR 6,475 crore in Q4 FY21 to INR 10,491 crore in Q4 FY22.
Jaguar Land Rover (JLR), the other key constituent of Tata Motors, however, saw revenues fall over 27% YoY, closing Q4 FY22 at revenues of INR 48,023 crore. JLR also saw its full year revenues drop 7.2%, while FY22 revenues of TCV and TPV grew by 57.9% and 89.8% respectively.
Passenger Vehicles
As mentioned earlier, Tata Motors’ PV business delivered a comprehensive turnaround in Q4 FY22 with its highest quarterly revenues of INR 10,491 crore, an increase of 62%. Significantly, the company’s EV volumes rose to over 9,100 units in Q4 and PV market share improved to 13.4% (+440 bps).
The company said that the EV business will drive up penetration and accelerate sales further. The business is expected to deliver strong improvement in margins and profitability in FY23, it added.
Meanwhile, the company also reported that it achieved positive EBIT in Q4 FY22 and a strong 750 bps EBIT improvement for FY22. Market shares continue to improve to 12.1% in FY22, it said.
Still impacted by the chip crisis, the company at present is directing its resources towards its high-end vehicles, as they also bring in higher profits. However, unlike other manufacturers, the company’s lower end vehicles are still doing well, especially the iCNG range, which has helped garner more customers in these times of high fuel cost, the company said.
Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles & Tata Passenger Electric Mobility said, “In a challenging year disrupted by Covid, semi-conductor crisis and steep increase in commodity prices, Tata Motors set several new records in passenger and electric vehicles to make FY22 a landmark year.”
He added that the company posted its highest ever annual, quarterly and monthly sales in March 2022 and introduced new nameplates and aspirational variants to substantially improve its market share overall as well as in every segment of cars and SUVs, where it has a presence.
It must be noted that the company also operationalised two subsidiaries – Tata Motors Passenger Vehicles that focusses on passenger vehicles powered by IC engines, and Tata Passenger Electric Mobility that would aim at accelerate the development of the passenger EV business and its enabling ecosystem with TPG Rise Climate as an investor.
Chandra said the company remains agile amidst the uncertain semiconductor situation and supply side challenges, and will continue to take prudent actions while enhancing its focus on future-fit initiatives of transforming customer experience digitally and strengthening Tata Motors’ established lead in sustainable mobility.
Commercial Vehicles
After two successive years of decline, the CV industry witnessed a strong rebound in FY22 with the domestic business gaining market share across all segments.
For Tata Motors’ CV business, Q4 revenues grew over 29% YoY and 34% QoQ. While in Q4, EBITDA margins were at 5.9% (lower by 290 bps YoY), QoQ saw a 330 bps recovery due to the impact of price hikes, improved mix and stable commodity prices in Q4, said the company. At INR 52,387 crore, its FY22 revenue increased by over 58%.
In terms of sales, Q4 Tata CV global wholesales grew over 7.6% to over 122,300 units. For the full year, the company sold over 367,500 units, growing by over 37%. Even in the domestic market, the company’s wholesales grew by over 7% in Q4, while domestic retails increased by over 16% to 107,400 + units. For FY22, domestic wholesales rose by 34% +, while domestic retails at 319,100+ units grew by over 53%.
Overall, domestic CV market share for Tata Motors improved to 44.9% in FY22 with all segments gaining shares, the company reported.
Girish Wagh, Executive Director, Tata Motors said, “At Tata Motors, the early adoption of a holistic ‘Business Agility Plan’ enabled us to protect and serve the interests of our customers, dealers and suppliers as well as smartly manage supply related challenges including the global shortage of critical electronic parts.”
During the past two years, the company optimised production, introduced new passenger and cargo mobility solutions and accelerated sales to grow every quarter and gain higher market share in every segment of commercial vehicles, Wagh said.
He continued that the improvement in consumer sentiment, buoyancy in e-business, firming freight rates, reopening of schools and offices and higher infrastructure spends in road construction and mining helped regenerate demand.
Meanwhile, the company believes business is poised to grow further on the back of increased activity in road construction, mining and improved infrastructure spending. The supply situation also continues to show gradual improvement, the release said.
Challenges notwithstanding, Tata Motors said it will continue to step-up its investments in products and new business models to deliver customer value, while ensuring profitable growth. Despite near-term supply challenges and inflation concerns, the business aims to deliver strong margins recovery and profitability in FY23, it said.
Jaguar Land Rover
The company’s luxury division, JLR reported a revenue generation of £4.8 billion in Q4 FY22, up by 1% from Q3 FY22. This reflects the 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 company said. Q4 wholesales improved 11% to 76,500 units, but full year volumes of 294,182 were down 15%, it reported. Free cash flow improved to £340 million, up from £164 million in Q3, JLR said.
Further, the company saw strong demand from its new line-up of vehicles, helping for an order book of more than 168,000 units including 46,000 units of the new Range Rover and 41,000 units of the Defender, up 13,000 units in Q4.
JLR expects the global semiconductor shortage to continue through the next fiscal with gradual improvement. However, the 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, it said. Volumes are expected to improve progressively thereafter, it added.
Thierry Bolloré, CEO, JLR said although the environment remains difficult in light of the global chip shortage and other challenges, he is encouraged by the continuing strong customer demand for JLR products, highlighted by a record order book. “We are continuing to execute our Reimagine Strategy with exciting new products like the Defender, New Range Rover and just announced New Range Rover Sport while we are rapidly progressing our plans for a new generation of electric vehicles with our all electric Jaguar strategy and BEV first EMA platform for new Land Rover products,” he said.
Others
Tata Motors also reported that net loss for the year from joint ventures and associates amounted to INR 74 crore, compared with a loss of INR 379 crore in FY21. Excluding grants, other incomes for the group stood at INR 929 crore in the current year against INR 725 crore in the earlier fiscal. Free cash flow (automotive) in the year, was negative at INR 9,500 crore as compared to a positive INR 5,300 crore in FY21), primarily due to working capital impact of INR 9,600 crore, the company stated.