The Indian operations of leading automobile manufacturer Tata Motors continued to weigh down the company which reported a drop of 7.1 per cent in consolidated net profit for the quarter ended September 2014 at Rs 3,291 crore. Consolidated revenues rose 6.5 per cent to Rs 56,867 crore owing to a good showing by Jaguar Land Rover (JLR). The operating margin was up 60 basis points at 15.8 per cent.
C. Ramakrishnan, CFO, Tata Motors said two factors impacted JLR. "Higher tax provisioning and more importantly, with the new launches, higher depreciation and amortization while in India, some tax reversals of credits impacted the profitability."
Indian operations report loss
Tata Motors’ India operations reported a loss of Rs 1,845.63 crore (loss of 803.53 crore) on total income of Rs 8,750 crore (Rs 8,868.4 crore). Operating margin was negative 1.7 per cent (2 per cent) with tax was at Rs 738.2 crore (credit of Rs 180 crore).
"There was a sharp reversal in performance over the last 10 quarters with the medium & heavy commercial vehicle (M&HCV) sales growing 14.1 per cent due to firm freight rates and replacement demand," Ravi Pisharody, ED, CV Business, Tata Motors told a press conference. Subdued infrastructure activity and high interest rate regime impacted the quarter performance.
"The small CV segment continues to be hit by constrained financing but will pick up next year," he said. The company expects the Bolt car to be launched in the current quarter and Safari Storm facelift to drive growth.
JLR’s strong performance
An increase in wholesale volume and richer product mix saw JLR report a net profit of 450 million pounds (507 million pounds) for the September quarter on 4.2 per cent higher revenues of 4.808 billion pounds. Kenneth Gregor, CFO, JLR said the bottomline was impacted by unfavorable revaluation of foreign current debt, unrealized hedges, higher depreciation and amortization. Wholesale sales rose 2 per cent to 103,000 units while retail sales were up 8 per cent at 110,000 units. Operating profit rose 15.3 per cent at 933 million pounds and operating margin was was 19.4 per cent (17.5 per cent).
He said the China facility is expected to commence operations in the next few months and will reach a capacity of 130,000 units by 2016. "It will initially make the Range Rover Evoque and ramp up and also make Discover Sport and Jaguar XF in 2015." He said the plan was to expand the global footprint and JLR would start production at its Brazilian facility in 2016.
On the Bombay Stock Exchange, Tata Motors fell 0.47 per cent to close trade at Rs 523.8.
