TTM Tata Motors Ltd

Form 6-K dated November  2, 2023 along with the Press Release.

JLR Revenue £6.9b up 30.4%, EBITDA at 14.9% (+430 bps), EBIT at 7.3% (+630 bps)

Tata CV Revenue ₹20.1K Cr, up 22.3%, EBITDA at 10.4% (+540 bps), EBIT at 7.9% (+560 bps)

Tata PV Revenue ₹12.2K Cr, down 3.0%, EBITDA at 6.5% (+110 bps), EBIT at 1.8% (+140 bps)

Consolidated

(₹ Cr Ind AS)

Jaguar Land Rover

(£m, IFRS)

Q2

FY24

H1

FY 24

Tata Motors Group Results Q2 FY24

Revenue of £6.9 billion in Q2 and record first half revenue of £13.8 billion, up 30% and 42% yoy respectively driven by higher wholesales, better mix, cost reductions and investment in demand generation.

EBIT margin was 7.3% in Q2 and 8.0% in H1; the target EBIT margin for FY24 is increased from 6% plus to around 8%.

PBT (bei) in Q2 FY24 was £442 million, up over £600 million compared to PY. H1 FY24 PBT (bei) of £877m, up over £1.5 billion compared to H1 FY23.

Free cash flow of £300 million for Q2 FY24 and £751m for H1 FY24, which is JLR’s best H1 cashflow on record.

Total liquidity was at £5.8 billion including the £1.52 billion undrawn revolving credit facility maturing in March 2026. Net debt reduced to £2.2 billion in Q2, with gross debt of £6.5 billion.

In mid-October, JLR completed a buyback of c. $400 million equivalent of its outstanding bonds, demonstrating the recent strong financial performance of the company and resulting liquidity.

The order book remained strong with over 168,000 client orders, with RR, RR Sport and Defender accounting for 77% of the order book.

Investment of £15bn over five years to transition to our electric future continues:

Investing more than £1.4bn over next five years in JLR’s Halewood plant, in Merseyside and Solihull plant, in the West Midlands, UK, to produce next generation electric models

JLR Nitra plant in Slovakia, also confirmed to build next generation electric vehicles

£250m investment in JLR Future Energy Lab at Whitley Engineering Centre, Coventry, UK, to develop electric drive units (EDUs) in-house

Further hiring drive for 300 new technician roles to develop and build next generation EVs at JLR’s West Midlands, UK engineering and manufacturing sites

JLR partners with Wykes Engineering to develop one of UK’s largest second life battery energy storage schemes.

Tata Motors Group Results Q2 FY24

Q2 FY24 revenue at ₹20.1KCr, (+22.3%), EBITDA 10.4% (+540 bps), EBIT 7.9% (+560 bps), PBT (bei) ₹1.5K Cr.

H1 FY24 revenue at ₹37.1KCr, (+13.4%), EBITDA 10.0% (+480 bps), EBIT 7.2% (+460 bps), PBT (bei) ₹2.5K Cr.

Double-digit EBITDA achieved.

Domestic CV market share (based on Vahan) at 39.7% in Q2 FY24, up from 39.1% in Q1 FY24. HGV+HMV 50.4%, MGV 37.6%, LGV 34.3%, Passenger 36.6%.

HGV+HMV market shares up 500bps qoq on superior performance of BS6 PH2 products. MGV market shares up 360bps qoq on better availability. Action plans underway to improve LGV market shares.

Achieved landmark of supplying 1000 e-Buses nationwide.

Delivered first of its kind hydrogen cell powered bus to Indian Oil, marking a giant stride forward in India’s quest for fully decarbonized long distance, urban mobility.

Tata Motors Group Results Q2 FY24

Q2 FY24 revenue at ₹12.2KCr, (-3.0%), EBITDA 6.5% (+110 bps), EBIT 1.8% (+140 bps), PBT (bei) ₹0.3 K Cr.

H1 revenue at ₹25.0KCr, (+3.8%), EBITDA 5.9% (+10 bps), EBIT 1.4% (+80 bps), PBT (bei) ₹0.5 K Cr.

VAHAN registration market share steady at 13.4 % in H1 FY24. EV registration market share at 73.4%.

EV penetration at 13%, CNG penetration at 14% in H1 FY24.

Launched new Nexon and Nexon.ev with premium design and best-in class tech features. Range of Nexon.ev extended to 465 kms.

Introduced twin cylinder iCNG technology in Tiago, Tigor, Punch enabling no compromise on boot space, best-in-class features and a superior drive experience.

Launched new avatars of Safari and Harrier, with significant design changes and addition of several futuristic technologies.

New Safari and Harrier got prestigious GNCAP 5-star rating for both adult and child occupant protection, with unique distinction of securing highest score by an Indian car.

TPEM introduced new brand identity “Tata.ev” for the EV business, embodying the core philosophy of “Move with Meaning,” unifying the values of sustainability, community, and technology.

Tata Motors Group Results Q2 FY24

8th floor, Business Plaza

Westin Hotel Campus

36/3-B, Koregaon Park Annex

Mundhwa Road, Ghorpadi

Pune - 411 001, India

Telephone: +91 (20) 6747 7300

Fax: +91 (20) 6747 7100

are presented in accordance with the requirements of Regulation 33 and Regulation 52(4) read with Regulation 63 of the Listing Regulations in this regard; and

give a true and fair view in conformity with the recognition and measurement principles laid down in the applicable accounting standards, and other accounting principles generally accepted in India, of the net profit and other comprehensive income and other financial information for the quarter ended 30 September 2023 as well as the year to date results for the period from 1 April 2023 to 30 September 2023.

Identify and assess the risks of material misstatement of the standalone financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial results made by the Management and Board of Directors.

Conclude on the appropriateness of the Management and Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the standalone financial results, including the disclosures, and whether the standalone financial results represent the underlying transactions and events in a manner that achieves fair presentation.

Particulars

I.

II.

III.

IV.

(a)   Cost of materials consumed

(b)   Purchases of products for sale

(c)   Changes in inventories of finished goods, work-in-progress and products for sale

(d)   Employee benefits expense

(e)   Finance costs

(f)   Foreign exchange loss (net)

(g)   Depreciation and amortisation expense

(h)   Product development/engineering expenses

(i) Other expenses

(j) Amount transferred to capital and other accounts

V.

VI.

(a)   Provision for employee pension scheme (Refer note 4)

(b)   Impairment of property, plant and equipment

(c)   Provision for Intangible assets under development

(d)   Provision for loan given to/cost of closure of subsidiary companies

(e)   Employee separation cost

VII.

VIII.

(a)   Current tax

(b)   Deferred tax

IX.

X.

(A)  (i)    Items that will not be reclassified to profit and loss

(ii)  Income tax (expense)/credit relating to items that will not be reclassified to profit and loss

(B)  (i)    Items that will be reclassified to profit and loss

(ii)  Income tax (expense)/credit relating to items that will be reclassified to profit and loss

XI.

XII.

XIII.

XIV.

(a)   Ordinary shares (face value of ₹ 2 each)

(i) Basic

(ii)  Diluted

(b)   ‘A’ Ordinary shares (face value of ₹2 each)

(i) Basic

(ii)  Diluted

I.   ASSETS

(1) Non-current assets

(a) Property, plant and equipment

(b) Capital work-in-progress

(c) Right of use assets

(d) Other intangible assets

(e) Intangible assets under development

(f) Financial assets

(i) Investments in subsidiaries, joint ventures and associates

(ii) Other investments

(iii) Loans and advances

(iv) Other financial assets

(g) Deferred tax assets (net)

(h) Non-current tax assets (net)

(i) Other non-current assets

(2) Current assets

(a) Inventories

(b) Financial assets

(i) Investment in subsidiary (Refer note 7)

(ii) Investments measured at Fair value through profit and loss

(iii) Trade receivables

(iv) Cash and cash equivalents

(v) Bank balances other than (iv) above

(vi) Loans and advances

(vii) Other financial assets

(c) Other current assets

TOTAL ASSETS

II.   EQUITY AND LIABILITIES

Equity

(a) Equity share capital

(b) Other equity

 Liabilities

(1) Non-current liabilities

(a) Financial liabilities

(i) Borrowings

(ii) Lease liabilities

(iii) Other financial liabilities

(b) Provisions

(c) Deferred tax liabilities (net)

(d) Other non-current liabilities

(2) Current liabilities

(a) Financial liabilities

(i) Borrowings

(ii) Lease liabilities

(iii) Trade payables

(a) Total outstanding dues of micro and small enterprises

(b) Total outstanding dues of creditors other than micro and small enterprises

(iv) Acceptances

(v) Other financial liabilities

(b) Provisions

(c) Current tax liabilities (net)

(d) Other current liabilities

TOTAL EQUITY AND LIABILITIES

I

II

III

The above results were reviewed and recommended by the Audit Committee on November 1, 2023 and approved by the Board of Directors at its meeting held on November 2, 2023.

The above results include the Company’s proportionate share of income and expenditure in its Joint Operation, namely Tata Cummins Private Limited and its subsidiary. Below are supplementary details of Tata Motors Limited on standalone basis excluding interest in the aforesaid Joint Operation:

Particulars

Additional Information pursuant to requirement of Regulation 52(4) and Regulation 54(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation 2015 as amended and as at six months ended September 30, 2023:

Particulars

a)

Debt Equity Ratio (number of times)

[Total Debt⁽ⁱ⁾/ Equity⁽ⁱⁱ⁾]

b)

Debt Service Coverage Ratio (number of times) (not annualised)

[(Profit/(loss) before exceptional items and tax+Interest on Borrowings)/(Interest on Borrowings + Repayment of Borrowings⁽ⁱⁱⁱ⁾)]

c)

Interest Service Coverage Ratio (number of times) (not annualised)

[(Profit/(loss) before exceptional items and tax+Interest on Borrowings)/Interest on Borrowings]

d)

e)

f)

g)

h)

(a)   Ordinary shares (face value of ₹ 2 each)

(i) Basic (₹)

(ii)  Diluted (₹)

(b)   ‘A’ Ordinary shares (face value of ₹2 each)

(i) Basic (₹)

(ii)  Diluted (₹)

i)

Current ratio (number of times)

[Current assets / Current liabilities]

j)

Long term debt to working capital (number of times)

[Long Term Borrowings^(v)/Working capital^(vi)]

k)

Bad debts to Account receivable ratio (%)

[Bad Debts^(vii) / Average of Trade and Other Receivables^(viii)]

l)

Current liability ratio (number of times)

[Current liabilities (excluding current maturities of Iong term debt and interest accrued on borrowings) / (Total liabilities)]

m)

Total debts to total assets (number of times)

[(Non current borrowings + Current borrowings) / Total assets]

n)

Debtors turnover (number of times) (not annualised)

[Revenue from operations / Average Trade receivables]

o)

Inventory turnover (number of times) (not annualised)

[Raw material consumed^(ix) / Average Inventory^(x)]

p)

Operating margin (%)

[(Profit/(loss) before tax +/(-) Exceptional Items + Foreign exchange loss (net) + Net Finance Charges + Depreciation and amortisation - Other Income (excluding incentives)) / Revenue from operations]

q)

Net profit margin (%)

[Net profit after tax / Revenue from operations]

r)

Security cover ratio (number of times)¹

[Secured Assets^(xi) / Secured Borrowings^(xii)]

8.80% non-convertible debentures of face value of ₹1,000 crores, earlier secured by creating a pari passu charge on certain tangible fixed assets, right of use assets and capital work-in-progress, have been repaid during six months ended September 30, 2023. Hence, Security cover ratio is Nil as at September 30, 2023.

Total debts includes non current and current borrowings

Equity = Equity share capital + Other equity

Repayment of borrowings includes repayment of long-term borrowings, proceeds from short-term borrowings, repayment of short-term borrowings and net change in other short-term borrowings (with maturity up to three months).

Net Worth has been computed on the basis as stated in Clause 2 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 i.e. Net worth as defined in sub-section (57) of section 2 of the Companies Act, 2013.

Long term borrowings (including current portion of long term borrowings).

Working capital = Current assets - Current liabilities (excluding current maturities of Iong term debt and interest accrued on borrowings).

Bad debts is write off of trade and other receivables.

Trade and other receivables includes Trade receivables, current and non-current loans and advances and other current and non-current assets.

Raw material consumed includes Cost of materials consumed, Purchases of products for sale and Changes in inventories of finished goods, work-in-progress and products for sale.

Inventory includes raw materials and components, work-in-progress, finished goods, stores and spare parts, consumable tools and goods-in-transit - raw materials and components.

Secured assets include written down value of secured assets and fixed deposits under lien.

Secured borrowings include 8.80% non-convertible debentures and term loans from financial institutions.

Tata Motors Limited is amongst the very few companies in India that has its own exempted Pension fund. In the past few years there have been multiple developments on this front. The Company in year 2019 had made an application to surrender the said Pension fund w.e.f October 1, 2019. However, the process of concluding the surrender has not yet happened. The Company incurred losses for three consecutive years (during FY 2019-20, 2020-21 & 2021-22), thereby calling for an automatic cancellation/withdrawal of pension fund exemption status. On November 4, 2022, the Hon’ble Supreme Court also ruled that those who were members of a statutory pension fund as on September 1, 2014, can exercise a joint option with their employer to contribute to their Pension fund beyond the statutory limit and be eligible to draw their pension calculated based on last 5 years average salary. The Company has received various representations from its employees (past and present) to extend the said pension benefits to them as well. To continue to serve the best interests of all stakeholders and to seek a finality on this matter and avoid long drawn litigation, after careful consideration, the Company has accepted and approved the joint options on the Employees Provident Fund Organisation (EPFO) portal, along with a communication to the EPFO that the Company shall fund the additional liability estimated through actuarial valuation. Accordingly, a provision of ₹44.70 crores and ₹691.07 crores has been made during the quarter and six months ended September 30, 2023 respectively, which has been disclosed as an Exceptional item. EPFO, however, has returned all the applications approved by the Company. The Company has filed a writ petition with Hon’ble Delhi High Court for seeking directions to EPFO to immediately start administering TML’s Pension Fund and not to reject the joint applications. The trade unions have also jointly filed another petition for expediting the transfer of pension fund corpus and accepting the joint applications of the employees for pension on higher salary. The High Court has issued notice to both the Ministry of Labour and EPFO.

The Board of Directors has, at its meeting held on July 25, 2023, approved (subject to inter alia the requisite National Company Law Tribunal (NCLT), regulatory and other approvals) a Scheme of Arrangement under Section 230-232 of the Companies Act, 2013, between Tata Motors Limited and its shareholders and creditors for reduction through cancellation of the “A” Ordinary shares and the payment of consideration for such reduction through the issuance of New Ordinary shares of the Company, in the manner contemplated in the Scheme of Arrangement. Expenses of ₹27.74 crores related to this scheme are recorded in retained earnings.

During the six months ended September 30, 2023, provision of ₹113.96 crores has been reversed towards certain Indirect taxes matters under litigation for FY 2002 to FY 2006, which is netted off in other expenses.

Investment in subsidiary classified under current financial assets includes partial stake (21.3%) in Tata Technologies Limited (TTL) held by the Company. Out of the above, on October 13, 2023, the Company has signed share purchase agreement to sell 9.9% stake in TTL for an aggregate consideration of ₹1,613.70 crores. The agreement is with TPG Rise climate SF Pte Ltd and Ratan Tata Endowment Foundation for purchasing 9% and 0.9%, respectively. Following the completion of this transaction, the Company’s stake in TTL has been reduced to 64.79%.

On October 19, 2023, the Company has signed Securities Subscription Agreement (SSA) and a Shareholders Agreement (SHA) for the acquisition of 26.79% stake in Freight Commerce Solutions Private Limited ‘Freight Tiger’ for a consideration of ₹150 crores. Freight Tiger is a digital platform that provides end-to-end logistics value chain solutions for cargo movement in the country. The SSA also includes a provision enabling Tata Motors to further invest over the next two years, at the then prevailing market value.

On October 30, 2023, Arbitration Tribunal has made an award in the arbitral proceedings pertaining to the capital investments made in the Singur project site in favour of Tata Motors Limited and has directed the respondent West Bengal Industrial Development Corporation (WBIDC) to pay compensation of ₹765.78 crores with interest thereon @11% p.a. from September 1, 2016 till actual recovery plus a ₹1.00 crore towards cost of the proceedings. The total amount as at September 30, 2023 is ₹1,363.45 crores. This event does not require any adjustment to the financial results as at September 30, 2023.

The Statutory Auditors have carried an audit of the above results for the quarter and six months ended September 30, 2023 and have issued an unmodified opinion on the same.

B S R & Co. LLP

Chartered Accountants

8th floor, Business Plaza

Westin Hotel Campus

36/3-B, Koregaon Park Annex

Mundhwa Road, Ghorpadi

Pune - 411 001, India

Telephone: +91 (20) 6747 7300

Fax: +91 (20) 6747 7100

We have reviewed the accompanying Statement of unaudited consolidated financial results of Tata Motors Limited (hereinafter referred to as “the Parent”), and its subsidiaries (the Parent and its subsidiaries together referred to as “the Group”) and its share of the net profit after tax and total comprehensive income of its associates and joint ventures for the quarter ended 30 September 2023 and year to date results for the period from 1 April 2023 to 30 September 2023 (“the Statement”) (in which are included interim financial statements/financial results/financial information of two joint operations), being submitted by the Parent pursuant to the requirements of Regulation 33 and Regulation 52(4) read with Regulation 63 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”).

This Statement, which is the responsibility of the Parent’s management and approved by the Parent’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”), prescribed under Section 133 of the Companies Act, 2013, and other accounting principles generally accepted in India and in compliance with Regulation 33 and Regulation 52(4) read with Regulation 63 of the Listing Regulations. Our responsibility is to express a conclusion on the Statement based on our review.

We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”, issued by the Institute of Chartered Accountants of India. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The Statement includes the results of the entities mentioned in Annexure I to the Statement.

Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review reports of the other auditors referred to in paragraph 6 and 8 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 and Regulation 52(4) read with Regulation 63 of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Registered Office:

14th Floor, Central B Wing and North C Wing, Nesco IT Park 4, Nesco Center, Western Express Highway, Goregaon (East), Mumbai - 400063

We did not review the interim financial statements /financial information/ financial results of two subsidiaries and 55 step-down subsidiaries included in the Statement, whose interim financial statements /financial information/ financial results reflects total assets (before consolidation adjustments) of Rs.2,87,721.69 crores as at 30 September 2023 and total revenues (before consolidation adjustments) of Rs. 74,181.43 crores and Rs. 1,47,791.08 crores, total net profit after tax (before consolidation adjustments) (net) of Rs. 2,981.52 crores and Rs. 6,296.81 crores and total comprehensive income/(loss) (before consolidation adjustments) (net) of (Rs. 45.49 crores) and Rs. 8,630.51 crores , for the quarter ended 30 September 2023 and for the period from 1 April 2023 to 30 September 2023 respectively, and cash in-flows (before consolidation adjustments) of Rs. 5,168.91 crores for the period from 1 April 2023 to 30 September 2023. as considered in the Statement. The Statement also include the Group’s share of net profit/(loss) after tax of (Rs. 22.02 crores) and Rs. 124.06 crores and total comprehensive income / loss of (Rs. 22.02 crores) and Rs. 124.06 crores, for the quarter ended 30 September 2023 and for the period from 1 April 2023 to 30 September 2023 respectively as considered in the Statement, in respect of three associates and two joint ventures, whose interim financial statements / interim financial information/ interim financial results have not been reviewed by us. These interim financial statements / interim financial information/ interim financial results have been reviewed/audited by other auditors whose reports have been furnished to us by the Parent’s management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries/ step-down subsidiaries/ associates/ joint ventures, is based solely on the reports of the other auditors and the procedures performed by us as stated in paragraph 3 above.

The Statement includes the interim financial statements /financial information/ financial results of seven subsidiaries and eight step-down subsidiaries which have not been reviewed, whose interim financial statements /financial information/ financial results reflect total assets (before consolidation adjustments) of Rs. 3,215.68 crores as at 30 September 2023 and total revenues (before consolidation adjustments) of Rs. 645.52 crores and Rs. 996.63 crores , total net loss after tax (before consolidation adjustments) (net) of Rs. 9.64 crores and Rs. 17.26 crores and total comprehensive loss (before consolidation adjustments) (net) of Rs. 9.54 crores and Rs. 17.16 crores, for the quarter ended 30 September 2023 and for the period from 1 April 2023 to 30 September 2023 respectively, and cash outflows (before consolidation adjustments) (net) of Rs. 3,372.37 crores for the period from 1 April 2023 to 30 September 2023. as considered in the Statement. The Statement also includes the Group’s share of net profit after tax of Rs. 67.61 crores and Rs. 127.98 crores and total comprehensive income of Rs. 67.61 crores and Rs. 127.98 crores, for the quarter ended 30 September 2023 and for the period from 1 April 2023 to 30 September 2023 respectively as considered in the Statement, in respect of four associates and one joint venture, based on their interim financial statements /financial information/ financial results which have not been reviewed. According to the information and explanations given to us by the Parent’s management, these interim financial statements /financial information/ financial results are not material to the Group.

We did not review the interim financial statements/financial information/financial results of one joint operation included in the Statement, whose results reflect total assets (before consolidation adjustments) of Rs. 9,453.13 crores as at 30 September 2023 and total revenues (before consolidation adjustments) of Rs. 4,444.74 crores and Rs. 9,646.41 crores, total net profit after tax (before consolidation adjustments) of Rs. 102.55 crores and Rs. 280.47 crores and total comprehensive income/ (before consolidation adjustments) of Rs. 102.50 crores and Rs. 280.59 crores, for the quarter ended 30 September 2023 and for the period from 1 April 2023 to 30 September 2023 respectively, and cash outflows (before consolidation adjustments) of Rs. 177.33 crores for the period from 1 April 2023 to 30 September 2023, as considered in the statement. The interim financial statements/financial information/financial results of this joint operation has been reviewed by other auditor whose report has been fursnished to us by the Parent’s Management, and our conclusion in so far as it relates to the amounts and disclosures included in respect of this joint operation, is based solely on the report of such other auditor and the procedures performed by us as stated in paragraph 3 above.