India’s Tata Motors Ltd will significantly reduce its group automotive debt of 480 billion rupees ($6.4 billion or roughly R107.38 billion) over the next three years, the company’s chairman said during its annual shareholder meeting on Tuesday.
Tata Motors is “developing this business substantially” and has set targets to generate free cash flow, said Natarajan Chandrasekaran.
Car manufacturers globally have been hit hard by the Covid-19 pandemic, which has hurt demand for car and disrupted supply chains due to curbs on travel and the movement of goods.
The company has said it is committed to cutting costs, tightening investment spending and improving profitability.
“The company is working with agility to transform towards a future that is strong, sustainable and financially rewarding,” Chandrasekaran said, adding that the group would also look to “unlock non-core investments”.
Tata Motors’ domestic business is expected to generate free cash flow from the 2021 fiscal year, while Jaguar Land Rover will achieve this a year later in 2022, said the company’s CFO PB Balaji, during a virtual shareholder meeting.
Shares of Tata Motors ended 5% higher on Tuesday, while the broader Mumbai market remained flat.