JLR drives Tata Motors’ net

We have been losing share in passenger cars, says CFO

Ravindra Pisharody ((left) , Executive Director, Commercial Vehicles, and . Karl Siym, Managing Director. Tata Motors Ltd , at a press conference in Mumbai on Wednesday. Photo: Shashi Ashiwal

Tata Motors, on Wednesday, reported an 11 per cent growth in its consolidated net profit at Rs.2,075 crore for the second quarter ended September, 2012, on the back of a good performance by Jaguar Land Rover (JLR).

Consolidated net revenues grew 20 per cent to Rs.43,403 crore on the back of strong demand, growth in volumes and favourable market mix at JLR. The operating margin moved up by two basis points to 13.5 per cent.

Macro factors hit Indian operations

On a standalone basis, Tata Motors was impacted by “weak macro-economic outlook and sluggish industrial demand coupled with diesel price increases, which impacted medium and heavy commercial vehicle sales,’’ said C. V. Ramakrishnan, Chief Financial Officer, Tata Motors.Competition was intense, he said. The standalone net profit of Rs.867 crore (Rs.102 crore) was significantly benefited by a dividend received from JLR and other subsidiaries, amounting to Rs.1,312 crore (150 million pound).

“Without this, it would have reported a loss,’’ said Mr. Ramakrishnan.

Standalone revenues fell 4 per cent to Rs.12,481 crore and the operating margin declined to 5.9 per cent (7.2 per cent).

In the domestic market, commercial vehicle (CV) sales grew 5 per cent to 1.36 lakh units driven by the light CV segment. The CV market share was at 59.7 per cent. Passenger car sales at 72,603 units grew 11.6 per cent and the market share was at 12.3 per cent.

“We have been losing share in passenger cars in the last few years and this time, volumes are lower than expected. A lot of work needs to be done,’’ said Tata Motors CFO.

Karl Slym, Managing Director, Tata Motors, said: “in India, new cars and features generate sales and so we will have a mix of refresh and new vehicles in CVs and passenger cars. In the second half, we plan to launch six cars and 25 CVs. In the long-term, we have to enter segments with volume growth like the UV (utility vehicle) segment.’’

JLR’s strong quarter

Jaguar Land Rover reported a 78 per cent higher net profit of 305 million pound on 13 per cent higher revenues of 3.3 billion pound and operating margins were at 14.8 per cent. The operating profit grew 16 per cent to 420 million pound. JLR benefited from favourable market mix and exchange rate environment. JLR sold 14 per cent more vehicles at 77,442 units with Jaguar volumes at 9,832 units and Land Rover at 67,610 units. China accounted for 21 per cent of JLR sales during the quarter.