A strong growth in volumes globally, buoyed by Jaguar Land Rover (JLR) crossing the one billion pound profit mark saw Tata Motors report a consolidated net profit of Rs.9,274 crore for 2010-11, more than two and a half times over last year's Rs.2,571 crore. The company's consolidated revenues were up 33 per cent at Rs.1.23 lakh crore (Rs.92,519 crore). The consolidated profit before tax was also up at Rs.10,437 crore (Rs.3,523 crore). The operating profit margin improved to 14.4 per cent (9.9 per cent).
The board of directors recommended a dividend of Rs.20 per ordinary share and Rs.20.50 per ‘A' Ordinary share. It also approved the sub-division of the ordinary and ‘A' ordinary shares lot of Rs.10 each into Ordinary and ‘A' Ordinary shares of Rs.2 each subject to shareholders' approval.
On a stand-alone basis, Tata Motors reported a lower net profit of Rs.1,812 crore (Rs.2,240 crore) mainly due to other income and exceptional item of Rs.958 crore in the previous year due to divestments. Revenues were up 35 per cent at Rs.48,040 crore (Rs.35,593 crore).
The operating margins were impacted by cost pressures, including higher commodity prices, and fell to 9.9 per cent. The operating profit rose by 14.2 per cent to Rs.4,771 crore (Rs.4,178 crore).
According to Tata Motors CFO C. Ramakrishnan, “the overall debt to equity ratio is around 0.6 and we would like to keep it between 0.5 and 0.75. There are margin pressures and hopefully we can keep increasing volumes but we will focus on internal efficiency and cost reduction.'' He added that the annual capital expenditure plans for JLR would continue to be around 1.5 billion pound for the next few years while for Indian operations, it would be around Rs.3,000-3,500 crore.
Tata Motors (India Operations) Managing Director P. M. Telang said Tata Aria would soon introduce the 2-wheel drive.
“We wanted to establish the premium product and now sell 250-300 units a month. We hope the 2WD will push volumes.''