Key Highlights of the Results: Q3’20
JLR continues its turnaround journey with another strong quarter
India improves sequentially; performance impacted by M&HCV decline (despite market share gain) and BSIV stock reduction
Consolidated results benefits from JLR China recovery and Project Charge offset by M&HCV decline & stock reduction in India
Q3’20: Volumes at 276K down 12%; Revenue ~ 72KCr down 7%
E81TDA margin at 9.9%(+140 bps); E81T margin at2.3% (+240bps)
P8T at 1,350Cr vs loss of a9,228Cr (includes impairment of 27,838Cr) in Q3’19
PAT (post share of profit of associates and JV) at ~1,756Cr; Free Cash Flow (Auto) 4KCr
Jaguar Land Rover: Performance improves – Continued recovery in China, Project Charge delivers
• Q3’20: Revenue£ 6.48 (+2.8%);
• E81TDA margin at 10.8%; EBIT margin at 3.3%; PBT £318M; PAT£ 372M
•China retail sales continue to grow (up 24.3%) • Strong demand for new Range Rover Evoque (global sales up 30.0%)
• All new Defender-customer orders building strongly
• Project Charge achieved £2.9 billion of cost and cash-flow improvements. ahead of its schedule
• Project Charge+ formally launched; Targets to achieve£ 1.18 of cost and cash savings:- £400 million in Q4 FY 20 and £700 million in FY 21.
Tata Motors (Standalone incl JO): Turnaround 2.0 – Managing the slowdown by doing it right
• Q3’20: Revenue 11KCr (down 33%); P8T ~ (1,024) Cr; PAT ~ (1.040) Cr
• Performance impacted primarily by lower volumes, stock correction and higher VME
• Focus on securing ecosystem viability and retail acceleration; System stock reduced by around n .SKCr
• Focused actions on the Working Capital Led to Positive Free Cash flows of 2.4KCr for the quarter
• CV (Dam) retails higher by 16%(vs wholesales), PV(Dom) retails higher by 35%(vs wholesales)
• Exciting product actions in PV- Launched refreshed 8S VI ranges, Altroz and Nexon EV; more to follow
• Tata Altroz received 5-Star Global NCAP rating, becoming India’s safest car after Nexon
Jaguar Land Rover cont1nued 1ts turnaround and transformation JOurney w1th another quarter of strong delivery. Chma continues to improve gradua lly w hile Project Cha rge is well ahead of plans having already de livered £2.98 so fa r. “Project Charge+” has been formally launched to deliver £1.18 of cost and cash savings (£0.48 in Q4FY20 and £0.78 in FY21).
The product offensive continued with the launch of the New Defender whose order books are building up strongly. However, global markets remain challenging and, in this context, we are focused on leveraging our strong brands and exciting product portfolio to step up revenue growth while rigorously executing our cost savings plans. In India, the auto industry continues to be impacted by the general economic slowdown.
The profitability was impacted by adverse mix where despite increasing market shares, M&HCV volumes declined. This coupled with proactive system stock reduction of 3,800Cr resulted in loss of operating leverage. Though the near-term market situation is fluid, we are optimistic on the medium term as we launch our exciting 85 VI range of products with our system inventory at a multi-year low. We remain focused on driving our Turnaround strategy and transitioning seamlessly to 8SVI. As we strengthen our internal capabilities, we remain confident of delivering competitive, consistent and cash accretive growth.
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