Global demand muted, gradual improvement expected: TataMotors

New Delhi: Tata Motors expects demand to remain sluggish in overseas markets this fiscal while pinning hopes on a gradual bounce back in the domestic market on the back of new launches and the upcoming festive season.

Earlier this month, the Mumbai-based automaker reported a consolidated net profit of Rs 5,566 crore and total income of Rs 1,09,623 crore for June quarter. “Overall, from a demand perspective, we do anticipate that as far as the global demand is concerned, it is likely to remain muted. It has been that way. It’s likely to remain muted. No immediate changes there,” Tata Motors Global CFO PB Balaji said in an analyst call.

In the domestic market, the company expects a gradual improvement in demand during the rest of the year aided by government plans to invest on infrastructure, healthy monsoons, favourable overall economic macros, new launches and upcoming festive period, he noted. “So there is a need for absolute reason why there is optimism as far as the domestic demand buildup is concerned, how gradual it’s going to be, we will have to wait and see,” Balaji said. He noted that commodities are also likely to remain range bound and therefore, in this situation, the automaker is confident of sustaining the performance in the coming quarters, and delivering a strong year. “So financials wise, this business is on a strong wicket and is likely to remain that way in the coming quarters and the full year as well,” Balaji said. Passenger vehicle industry retail sales witnessed decline for two consecutive months — May and June, this fiscal.

Tata Motors Passenger Vehicles MD Shailesh Chandra cited high channel inventory as a notable challenge. “We have an all-time high channel inventory with further buildup which happened in Q1, did add stress on the wholesales.