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Tata Motors shares surged over 10% today after it announced a significant reduction in its losses in its Q4 results.
The company's losses narrowed down to Rs 1,033 crores from Rs 1,516 crores in the quarter that ended in December 2021, marking a 32% QoQ decline in losses. For the corresponding quarter last year, the company had reported a loss of Rs 7,605 crores, indicating an 86% YoY decline in losses.
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Revenues contracted 11.5% YoY from Rs 88,628 crores in Q4 last year, to Rs 78,439 crores this year. The loss of revenues was largely due to the performance of its subsidiary Jaguar. Its revenues improved 1% sequentially but declined 27% YoY to £4.8 billion due to the company's inability to acquire semiconductor chips on account of disruption in European and Chinese business.
"We expect performance to improve through the year as China Covid and semiconductor supply issues improve, and we aim to deliver strong EBIT improvement and free cash flows in FY23 to get to near net auto debt-free by FY2024," it said.
EBITDA margin declined to 11.2%. The passenger vehicle business delivered a comprehensive turnaround in the fourth quarter and demand remained strong despite geopolitical and inflation concerns.
The stock has been declining on a daily basis since 29th April as yesterday's close of Rs 372.30 marked a 14.9% decline in 2 weeks. The stock witnessed a full gap-up opening as it opened at Rs 387 per share and surged to touch a high of Rs 419.35 per share. It currently trades at around Rs 406 per share.
Article by Aman Agarwal.
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