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- Tata Motors Q2 Financial Results | Net Loss Reported Amid Revenue Growth
Mumbai4 minutes ago
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Tata Motors Passenger Vehicles Limited has suffered a net loss of Rs 5,531 crore on an annual basis in the second quarter. In the same quarter last year, the company had made a profit of Rs 76,170 crore.
However, the company’s revenue increased by 34% to ₹96,920 crore. It was ₹72,349 crore in the same quarter last year.
There was a profit of Rs 775 crore in the last quarter.
In the last quarter i.e. the first quarter of the financial year 2026-27, the company had made a profit of Rs 775 crore. The company’s revenue has increased by 1% on quarterly basis. Revenue in the last quarter was Rs 95,799 crore.
The company’s shares fell 3% today before the results.
Ahead of the results, the company’s shares closed at ₹287, down 3%. It has fallen 15% in the last six months and 28% in a year.
Since the beginning of this year till now (YTD), the shares of the company have fallen by about 22%. The market cap of the company is Rs 1.60 lakh crore.
Reason for loss of Tata Motors Passenger Vehicles
- Rising prices of raw materials: There was a huge continuous increase in the prices of raw materials (metal and other parts) used in making vehicles. This increased the production cost of the company and had a direct impact on the profits.
- Burden of additional expenses: The company had to incur some unexpected and additional expenses during the quarter. These huge expenses led to a decline in the company’s balance sheet and profits.
- Disturbance in sales ratio: The share of low-margin vehicles in the company’s total sales remained high, while the balance of high-margin vehicles got worse. This is called ‘adverse mix’, which reduced earnings.
- Global Market Challenges: The ongoing turmoil around the world and the slowness of the international market had an impact on the company’s JLR sales. Fluctuations in demand for luxury vehicles increased the company’s problems.
- Discontinued Jaguar older models: The company has gradually stopped the production of old models of Jaguar. As new electric (EV) models took off, the business was hit by the discontinuation of older models.
- Huge decline in JLR’s cash flow: Due to market challenges, JLR is estimated to have a ‘free cash outflow’ of £1.25 billion instead of cash inflows, reducing the company’s profit margin to a range of 2-3%.
What did the company’s top executives say on the results?
- Tata Motors PV has created a record by selling more than 2 lakh vehicles in this quarter and has registered an impressive growth of 40% on an annual basis.
- The company has maintained its dominance in the market by achieving a tremendous growth of 90% on an annual basis in the sales of electric vehicles.
- There was pressure on the company due to rising prices of raw materials, but it was handled by balancing prices and cutting expenses. Going forward, the company’s entire focus is on maintaining its fast pace, increasing production and strengthening profits.
- The company’s strong momentum continued in the domestic market, while JLR sales remained stable despite global challenges and the discontinuation of older Jaguar models. However, due to raw material inflation, there has been some impact on the company’s profit margin.
- Both businesses (domestic and JLR) are fundamentally strong. The company’s focus is now on increasing growth by launching new vehicles, cutting costs rapidly and improving cash flow.
5 signs of strong health of the company
- Revenue- Earnings should be continuously increasing.
- Expenses – The growth of expenses should be slower than that of sales.
- Profit – Profit is continuously increasing.
- EBITDA – This also increased along with sales.
- There should be an increase in EPS.
- Free cash flow is positive and growing.
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