Despite headwinds, carmaker JLR sees order-book boost

NEW DELHI: Luxury carmaker Jaguar Land Rover (JLR) expects its already-large order book to swell, despite economic headwinds and uncertainties in major markets such as Europe and China.

With no immediate stress on demand in sight, JLR is focusing on ramping up supplies to meet its 205,000-strong order book.

JLR’s September quarter sales rose 17.6% from a year earlier to 75,307 amid easing production constraints, parent Tata Motors Ltd said.

Tata Motors on Wednesday narrowed its consolidated second-quarter net loss to ₹945 crore from ₹4,441.57 crore a year earlier.

This is the seventh consecutive quarter in which the carmaker has failed to turn in a consolidated net profit. Consolidated net loss in the quarter ended 30 June was ₹5,006 crore.

Consolidated revenue rose 29.7% in the second quarter of the ongoing fiscal to ₹79,611 crore and the Ebitda margin widened 130 basis points from a year earlier to 9.7%. Ebitda is earnings before interest, tax, depreciation, and amortization.

Tata Motors has also decided to delist its American Depository Shares (ADS) from the New York Stock Exchange since the objectives behind the listing are not relevant anymore, it said. It will file for delisting in January. Shareholders will need to convert the ADS to underlying ordinary shares by July 2023, which will be tradeable on Indian stock exchanges.

Delisting ADS would simplify the financial reporting requirements of Tata Motors and reduce the administrative burden with listings in multiple geographies, it said.

Besides, participation in ADS has been consistently dropping and now accounts for less than 5% of ordinary shares.

“The order book for JLR remains strong and is growing, though we have started to ramp up production of the Range Rover and Range Rover Sport. So, we see continued demand there and, at this point, we have enough and more orders to fulfil and don’t see concern on demand,” P.B. Balaji, group chief financial officer, said in a postresults conference call.

“However, global markets are volatile and we will watch them cautiously. Our entire focus in the near term is on ramping up production,” he said.

Balaji, however, said there is some stress in the lower-end variants of the JLR portfolio, which is being addressed by an increase in marketing spending or customer discounts. In China, JLR continues to see good demand for its premium and luxury vehicles. In India, Tata Motors plans to complete the acquisition of Ford’s car factory in Sanand, Gujarat, by early next year, Balaji said.

Domestic passenger vehicle wholesales grew 69% to 142,755 vehicles as the carmaker ramped up supply for the festive season. Some demand moderation is expected, Balaji said the domestic order book at 100,000 units is aligned with demand, and there are no concerns around inventory build-up. Discounting actions to aid liquidation ahead of the implementation of BS-VI phase-II from April next year are likely to take place, he said.