Tata Motors Aims To Be A Zero Debt Firm According To Chairman In AGM Meeting
- ByAyushi Ray | July 31, 2021
Tata Motors aims to be a zero debt firm according to Chairman Natarajan Chandrasekaran in the AGM meeting. The largest automaker of the country by revenue, said that it WANTS TO stick to its plan to turn debt-free by FY24 despite its businesses being adversely impacted by the pandemic. Chandrasekaran stressed that the Tata Motors management is confident that they can reduce debt due to improved free cash generated by Jaguar Land Rover (JLR) and the growing domestic passenger and commercial vehicle businesses. It was announced at last year’s annual general meeting that Tata Motors aims to become a debt-free company within the next three years. The automaker now has three “fundamentally strong”businesses—the India passenger vehicles business, the commercial vehicles business, and the JLR business, Chandrasekaran said at Friday’s AGM, and they want to focus on these key areas, to make the company debt free.
It was earlier reported that there will be an improved operating performance in the fiscal third and the fourth quarter following improved sales of JLR vehicles in key markets such as China and the US. They also had a sharp recovery in passenger vehicle sales and gradual improvement in demand for commercial vehicles and this is what is helping them to improve financials of the India business. They also applied stringent cost-cutting measures in all three verticals and helped reduce the minimum volumes required to break even. JLR now needs to sell around 400,000 units to maintain profitability compared to more than 600,000 units in FY19. “Structurally, the businesses have achieved a lot of efficiency through various transformation initiatives in such a way that the break-even volumes have come down in each of these businesses,” he said.
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