Tata Motors on Friday reported a standalone net loss of Rs 1,281.97 crore for the quarter ended September 30, citing an industry wide slowdown. The automobile company had reported a net profit of Rs 109.14 crore for the corresponding period a year ago. In a regulatory filing after market hours, Mumbai-based Tata Motors said its revenue stood at Rs 9,913.33 in the second quarter of current financial year, marking a decline of 43.82 per cent compared to Rs 17,644.13 in the year-ago period.
"The industry wide slowdown over the last few quarters has significantly impacted volumes, profitability and cash flows and increased net debt to unsustainable levels," Tata Motors said in the regulatory filing.
The company said its board has decided to raise equity funds to strengthen and deleverage the balance-sheet.
Tata Motors said it would raise funds worth Rs 6,494 crore through issuing shares and convertible warrants to its parent company, Tata Sons.
"The Industry has been grappling with a long and sharp slowdown. Growth continues to be impacted by subdued demand, higher capacity from the new axle load norms, liquidity stress. low freight availability, weak consumer sentiment and general economic slowdown," said Guenter Butschek, CEO and managing director, Tata Motors.
"The sharp market decline over the last few months has impacted our Q2 performance as well which is disappointing. With the onset of festive season, we are seeing initial green shoots this month with better retails in Passenger Vehicles," he said.
Retail sales of its subsidiary Jaguar Land Rover declined 0.7 per cent to 1,28,953 units in the July-September period. However, its wholesales rose 2.39 per cent to 1,34,489 units.
Jaguar Land Rover's performance has started to improve and the pickup in China on better operational metrics is reassuring, however the unit faces risks from a slowing global economy, Tata Motors said.
"We are better prepared to tide over the current market challenges with proactive stock reductions, focus on retail acceleration and a deep commitment to the Turnaround journey," the CEO said.
Shares in Tata Motors fell as much as 5.70 per cent on the BSE ahead of the earnings announcement, before finishing the day at Rs 126.95 apiece, 4.87 per cent compared with the previous close. The shares underperformed the benchmark Sensex index which ended with a gain of 0.10 per cent after a volatile trading session.