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Tata Motors shares surge 3% as Chairman says demand for commercial and private vehicles strong

Tata Motors shares surge 3% as Chairman says demand for commercial and private vehicles strong

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By CNBC-TV18 Jul 5, 2022 12:09:55 PM IST (Updated)

Addressing shareholders, the Tata Motors Chairman N. Chandrasekaran said the shift to sustainable mobility is irreversible and the group will be among the leaders of green mobility, globally. ‘We aim to get to net-zero emissions (Scope 1, 2 and 3) by 2039 for JLR, 2040 for PVs, and 2045 for CVs,’ he said.

Shares of Tata Motors surged about 3 percent on Tuesday, reacting to a strong demand outlook given by the auto major's management.

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Addressing shareholders during the company's 77th annual general meeting, Tata Motors Chairman N Chandrasekaran said the second half of the current fiscal should be notably better in terms of performance, with gradual improvement in the overall supply situation and stabilisation in commodity prices.


"The overall supply situation, including that of semiconductors, is gradually improving and commodity prices are stabilising... Accordingly, expect performance to progressively improve through the year with the second half of FY23 being notably better than the first half," he noted.

At 11:05 IST, shares of Tata Motors were trading 2 percent higher at Rs 416.4 on the BSE.

On July 4. he said that demand for the company's vehicles across commercial vehicle (CV) and passenger vehicle (PV) segments — including EVs — remained robust and the Jaguar Land Rover (JLR) stood strong despite the ongoing geopolitical, supply and inflation concerns. 

He noted that the auto major is taking concerted action to be future-ready and create a virtuous cycle of growth and returns for its shareholders. "While the near-term outlook may be fluid with multiple challenges that I outlined above, the business is taking the right actions to navigate them, and I am confident that we will emerge stronger," Chandrasekaran said.

India business

Speaking about the company's India business, Chandrasekaran noted that while the overall industry volumes grew by 15 percent last fiscal, the company's domestic business grew by 49 percent by volume and 11.5 percent in terms of revenue.

Despite the margins being impacted by supply chain issues and runaway commodity inflation, the India business ended with strong free cash flows of Rs 1,879 crore, he stated.

Passenger and electric vehicles

Chandrasekaran said the passenger vehicles segment recorded its highest-ever domestic annual sales of 370,354 units, recording a 67 percent growth over FY21.

"The overall market share in PV increased to 12.1 percent touching 13.4 percent in Q4 FY22. Nexon is now consistently ranked as India’s No. 1 SUV and Punch consistently lists in the top 5 SUVs sold every month," he noted.

“In electric vehicles, the company registered the highest ever annual EV sales of 19,105 units in FY22 and our EV penetration in Q4 FY22 was 7.4 percent of our overall PV volumes,” Chandrasekaran added.

Commercial vehicles

The chairman said CV sales reflect economic growth and the resurgence in overall economic activity and it resulted in CV volumes rising by 37 percent this year.

"Amidst a challenging scenario, the CV business posted sequential quarter-on-quarter growth on the back of improved consumer sentiment, buoyancy in e-commerce, firming freight rates and higher infrastructure demand," he noted.

Chandrasekaran said the company gained market share in every segment of CVs in FY22 as compared to FY21 — medium & heavy commercial vehicle (M&HCV) to 58.2 percent; intermediate and light commercial vehicles (ILCV) to 49.0 percent; buses and vans to 44.8 percent and SCVs to 39.1 percent — to record a consolidated 44.9 percent market share.

Talking about Tata Motors' finance business, he said the company's assets under management (AUM) grew by Rs 2,410 crore to Rs 45,220 crore and it delivered a PBT of Rs 101 crore and a pre-tax ROE of 2.1 percent.

Jaguar Land Rover

On British luxury maker, Chairman said, "The global shortage of semiconductors had a disproportionately adverse impact on Jaguar Land Rover's production and sales. Yet, it delivered a resilient performance during the year."

"We are committed to restoring the profitability of this business as it returns to competitive growth and inflation stabilises," Chandrasekaran said.

"We are making rapid progress in our plans for developing a new generation of electric vehicles with our all-electric Jaguar strategy and BEV first EMA platform for new Land Rover products," Chandrasekaran said. The company is also working assiduously to address the supply side issues and is hopeful of a gradual recovery in performance through the year, he said.

Greenward bound

Chandrasekaran said the shift to sustainable mobility is irreversible and the Tata Motors Group will be amongst the leaders of green mobility, globally. "We aim to get to net-zero emissions (Scope 1, 2 and 3) by 2039 for JLR, 2040 for PVs, and 2045 for CVs. A clear road map is being drawn and several actions are already underway to deliver the same," Chandrasekaran stated.

He said history will record the last few years as relentless — a global pandemic that refuses to go away, record-high inflation, unfortunate military conflict, rising geopolitical risks and unprecedented supply chain challenges. Coping with this extraordinary sequence of events required care, speed, and agility, he added.

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