Chinese blast has Tata Motors reporting Rs 430 cr net loss

After many quarters of solid profit, auto major Tata Motors today reported a net loss of Rs 430 crore for the September quarter against a Rs 3,290.8 crore of net year-ago, on account of the blasts at godown at Tianjin Port in China where its lost over 2,000 luxury JLR cars.

The bottomline was also impacted by the rising finance cost and falling sales in China, its largest market. The company reported exceptional items for the quarter including a charge of Rs 2,493 crore on account of the vehicles damaged in the Tianjin Port explosions.

On August 13, there was a series of explosions at Tianjin Port in China where the company has its largest godown.

"The process for finalising an insurance claim may take some months to conclude, so insurance and other potential recoveries will only be recognised in future period when paid or confirmed and have not been recognised in this period," Jaguar Land Rover CEO Ralf Speth told reporters here.

Tata Motors' consolidated net sales during the quarter stood at Rs 60,853.03 crore against Rs 60,163.99 crore in the year-ago period, up 1.14 per cent.

"The subdued performance was mainly due to weaker China sales, foreign exchange revaluation and higher depreciation and amortisation expenses in the JLR unit," Tata Motors Group chief financial officer C Ramakrishnan said.

Strong sales in Britain, Europe and North America helped offset weaker sales in China and other emerging markets for JLR, which helped the company, Ramakrishnan said. On a standalone basis, the company fared well.

During the quarter, medium commercial vehicle units continued growth trajectory with a volume growth of 35.3 per cent y-o-y and 8.7 per cent q-o-q on the back of the continued replacement demand, moderate pre-buying and better profitability of the freight operators.

Strong growth in this segment has led to the overall revenue of the company increasing to Rs 10,501 crore with a growth of 20 per cent.

This along with ongoing cost reduction and other margin improvement initiatives have resulted in improvement of 840 bps in the EBITDA margin.

Accordingly domestic operations of the company massively improved its bottomline narrowing net loss to Rs 287.5 crore in the quarter, from Rs 1,845.6 crore net loss a year ago.