Tata Motors Ltd, the country’s biggest automaker by revenue, posted a higher-than-expected 71 per cent surge in profits, its first quarterly gain in 12 months, as sales at its Jaguar Land Rover (JLR) unit received a boost from new model launches.
This comes at a time when passenger and commercial vehicle sales in the domestic market have failed to show an uptick amid high interest rates and a rise in fuel prices, something that is adequately reflected in the company’s faltering profitability in its standalone India operations.
Tata Motors, part of the $100 billion Tata group, reported a consolidated net profit at Rs 3,541.86 crore for the second quarter ended September, up 70.71 per cent as against Rs 2,074.73 crore in the same period last fiscal. Net sales for the period under review stood at Rs 55,701.22 crore as against Rs 42,818.90 crore in July-September period of 2012-13, up 30.08 per cent. Tata Motors’ shares rose by 1.52 per cent to Rs 203.95 on the BSE on Friday.
On a standalone basis, though, the company posted a net loss of Rs 803.53 crore as compared to a net profit of Rs 867.11 crore in the same period of previous fiscal. The company’s standalone net sales also declined to Rs 8,761.10 crore as against Rs 12,396.46 crore during the same period of previous financial year.
In terms of unit volumes, the company said its sales stood at 1,50,930 units on a standalone basis as against 2,23,665 units in the year-ago quarter, down 32.51 per cent. “Continued slowdown in economic activity, low level of transport freight and infrastructure activity, frequent diesel price increases and tight financing environment, have impacted the industry during the quarter,” it said in a statement.
JLR CEO Ralf Speth said: “Our unrelenting focus on design, technology, innovation and quality has seen Jaguar Land Rover reach global consumers in more markets than ever before thanks to its most engaging product line-up.”
Strong global sales volumes boosted JLR’s revenues to £4,612 million for the second quarter, up 40 per cent on the same period last year. Profit after tax for the quarter grew by 66.2 per cent over the corresponding quarter last year to £507 million.
Rikesh Parikh, VP, Motilal Oswal Securities said, “We expect JLR’s performance to remain strong led by product actions and continued growth in emerging markets, particularly China. Domestic business could bounce back along with economic recovery, though