News Column

JLR bails out Tata Motors yet again

August 12, 2014

Net profit soars over threefold, best in 9 quarters

SURGING sales of Jaguar and Land Rover ( JLR) vehicles overseeas enabled Tata Motors triple its first- quarter net profit even as the company reported a drop in domestic sales.

Consolidated net profit rose to ` 5, 398 crore, the highest in nine quarters, compared with ` 1,726 crore in the same period last fiscal.

However, on a standalone basis, net profit declined by 44 per cent to ` 393.65 crore as against ` 703.26 crore in the year- ago period.

The Tatas bought Britain's iconic JLR in a distress sale in 2008 and have managed to offset its decline in the domestic market with strong sales growth in China, the world's biggest auto market.

Revenue from the company's British unit jumped by 53.89 per cent to ` 54,425.97 crore in Q1 as against ` 35,364.97 crore in the year- ago period.

Strong demand

" The continuing weak operating and economic environment in the domestic business was more than offset by strong demand for new products, growth in volumes, richer product mix and richer geographic mix at Jaguar Land Rover," Group chief financial officer C. Ramakrishnan told reporters.

Revenue from Tata's domestic brand vehicles and financing were at ` 9,898.38 crore, down 11.33 per cent from 11,163.9 crore in the same period a year ago. JLR retail sales in the quarter rose 22 per cent to 115,596 units from a year ago while sales of Tata Motors trucks, buses and passenger vehicles in the Indian market plummeted 28 per cent to 110,612 units.

Operating margins at JLR business rose to 20.3 per cent from 15.8 per cent a year ago while margins at its Indian business fell to minus 2.8 per cent. Consolidated revenue rose 38.2 per cent to ` 64,683 crore. " Tata Motors numbers are way ahead of our estimates of ` 3,500 crore," said Rahul Shah of Motilal Oswal Securities.

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Source: Mail Today (India)

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