A marked pick-up in sales volume and increased operating margins saw Tata Motors report a net profit of Rs.400.14 crore on a stand-alone basis for the third quarter of 2009-10 against a loss of Rs.263.26 crore in the same period last year. The company’s revenues at Rs.8,979.90 crore (Rs.4,758.62 crore) were up 89 per cent.
The company’s operating margins were at 12.8 per cent which is an improvement of 1,092 basis points. A volume recovery and marginal price increase undertaken by the company in October 2009 helped the company to maintain double digit margins. The profit before tax was at Rs.555 crore (loss of Rs.419.15 crore). The company’s debt-equity ratio has come down to 1.44 (1.6) and the debt on its books are at around Rs 20,000 crore.
According to the company, the introduction of new products by the company and continued growth in the existing portfolio, along with government stimulus, a benign liquidity environment and overall economic recovery, had driven domestic demand revival during the period. Sales volumes (including exports) were up 67.5 per cent at 165.413 vehicles (98,760 vehicles).
Addressing media, P.M. Telang, Managing Director, India-Operations, Tata Motors, said that although there had been a recovery of sorts for the industry, it was too early to withdraw the stimulus package. “It has been only one good quarter and the stimulus package should not be withdrawn.”
The company has planned a slew of new product launches. “We will launch the Magic Iris, a light commercial vehicle smaller than the Ace, the Aria cross-over and the Venture based on the Ace in the calendar year.”
In the domestic market, commercial vehicle sales were up 89 per cent to 93,520 units leading to a market share of 64.3 per cent. Also, the medium and heavy commercial vehicle sales grew by 122 per cent. Light commercial vehicles saw a growth of 70 per cent. The company says that while investment in infrastructure projects, continuing stimulus support and smooth implementation of the change in emission norms would influence the magnitude of growth in the coming quarters.
According to Mr. Telang, “we are currently making around 150 units a day and will go to 180 and a maximum of 200 per day to ensure that we do not affect the Ace production. Trials at the Sanand facility have started and we will commence commercial production in the next few months.”
C. Ramakrishnan, CFO, Tata Motors, said, “the company has completed most of its capital expenditure plans for the commercial vehicle and passenger car segments but we will continue to focus on new products and variants. Our annual capital expenditure will continue at an average of around Rs.2,500-3,000 crore.”
For the nine month period ended December 2009, Tata Motors reported a 300 per cent growth in the net profit at Rs.1,643 crore (Rs.409.80 crore) on a 25 per cent higher revenues of Rs. 23,363.35 crore (Rs.18,766 crore).
