Q3 2017 Real-Time Call Brief

Loading...
Loading...
Brief Report
Ticker : TTM
Company : Tata Motors Limited (ADR)
Event Name : Q3 2017 Earnings Call
Event Date : Feb 14, 2017
Event Time : 08:30 AM

Highlights



The consolidated turnover, net revenue was about Rs.67,000 crores, down marginally from Rs.70,000 crores in the previous year same quarter.

EBITDA percentage dropped to 8.9 from 13.8 and the Q3 profit, PAT, was about 112 crores compared to 2,900 crores in the same period last year.

Tata Motors standalone operations, and just to remind you on, the standalone the last two or three quarters includes effect of joint operations, namely the JVs that they have in India.

Including joint operations, the net revenue was flat at about 10,100 crores compared to 10,000 crores, more than the same number in the same quarter last year.

EBITDA percentage dropped significantly to 1.5% from 6% in the same period last year, and PAT was about 1,000 crores loss compared to 100 crores in the same period, same quarter last year.

Jaguar Land Rover, these are in pounds, net revenue up about GBP6.5 billion, an increase of from GBP5.8 billion for the same quarter last year.

EBITDA percentage however came low at 9.3% down from 14.4% and PAT was about GBP167 million compared to GBP414 in the same period last year.

In Tata Motors standalone automotive operations, the net debt equity touched about 0.93% to 1% at the end of the quarter.

In terms of the operating profit performance for this quarter, as I said, the EBITDA margin for the standalone business was about 1.5% mainly impacted by a de-growth of about 9% in the medium and heavy commercial vehicles.

LCVs are flat with growth of hardly about 0.2% year-on-year.

Car segment however grew for us well at 31% and we had good exports growth of about 34%.

Jaguar Land Rover on the EBITDA which was GBP611 million at 9.3% mainly reflects the lower wholesale volumes in the quarter compared to a year ago.

The effect of this market wholesale volumes and product mix and market mix make up almost 2% including the runout cost of the Discovery.

Marketing expense continue to increase and affected the margins by about 1.7%.

New model launch cost and pay negotiation settlement payments also impacted the margin, both together by about 0.7%.

If you have to re-look at the EBITDA differently, the realized losses if you were to add it to revenue, remove it from the revenue, the equal and EBITDA margin would have been about 10.1% instead of 9.3%.

Commercial Vehicles: Domestic CV volumes of the company declined by about 4.1% in all, within which M&HCV segment as I mentioned before, declined by about 9% in this quarter.

However, strangely even the M&HCV the concept and buses segment witnessed strong growth upwards of 30%.

Passenger vehicle industry have posted a growth of about 1.9% in Q3.

For Tata Motors we saw the passenger vehicle business grew by about 25%.

Within this passenger car segment for the industry de-grew by by 2.4%.

In our case the car part of our portfolio grew by about 31%.

Jaguar Land Rover wholesale volume stood at about 130,000 units and retail was about 129,000.

The China JV wholesale and retail volumes came in at around 21,000 and about 19,000 respectively.

In terms of retail sales, we saw our North American market grow by about 20% .

China since I'm talking retail, this includes the JV sales into the retail, China as a whole the retails went up by about 38%, Europe 7%, but however UK saw a decline about 3%, and overseas even more so at about 21%.

For the quarter the capital expenditure product development spend was about little over GBP900 million, part of the annual indication we had given upwards of GBP3.5 billion.

After this investment in the quarter of GBP926 million on CapEx and product development the free cash flow for the quarter was about GBP44 million.

In cash and liquid investments we have about GBP3.8 billion and further we have another almost GBP2 billion of undrawn unutilized committed bank lines.

Little more color of the profit before tax which came in at GBP255 million
for JLR for the quarter.

It is down from GBP499 million in the same quarter last year.

Higher depreciation and amortization charge of about GBP52 million, which is trend we have seen in many quarters, unfavorable unrealized FX and commodity hedges and revaluation US dollar debt revaluation about GBP42 million, offset somewhat by higher China JV profits compared to year-ago about GBP13 million and lower net finance cost about GBP5 million.

We also recovered further recoveries related to China fire loss about GBP55 million.

Share of China JV profits for the quarter was about GBP35 million.

On the product side, we are very well prepared for the launches shortly happening in Q4 partly and in April and it could be our aim and strong commitment to get back in a position of more than 60% market share over the next two years in the M&HCV segment from the current level of about 55% to 56%.

We expect export growth to continue in the range of about 30% as we continue to grow at this rate into the next year.

We have done fair valuation of some of our assets notably land to the extent of about over 4,000 crores including certain restatement of foreign exchange loans as required by the standard.

The equity method of accounting for certain JVs combining all this at a standalone level, we see net of the fair valuation upward and downward, we see a net impact positive in the equity of about 900 crores.


Loading...
Loading...
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...