Strong demand for its luxury Jaguar Land Rover vehicles and a one-time accounting gain saw Tata Motors on Monday beat analyst estimates to post a 195% jump in net profit to R4,804 crore for the October-December quarter.
During the period, the company?s consolidated revenue surged 38.6% to R63,876.8 crore, beating analyst estimates of R62,109 crore.
However, on a standalone basis, Tata Motors? domestic operations delivered a net profit of R1,251 crore against a net loss of R458.5 crore in the same quarter last fiscal. The net profit was on account of Tata Motors divesting investments in certain foreign subsidiary companies to TML Holdings Pte, Singapore, a wholly owned subsidiary.
Domestic revenue declined for the seventh straight quarter, falling 26.9% to R7,769.7 crore. The company attributed the weak performance in the domestic market to a general economic slowdown, frequent diesel and petrol price hikes and a tight financing environment.
?Operational performance for the domestic business continues to be a matter of concern. The return to profitability during the quarter was on the account of the restructuring initiative that was taken as a result of overseas investment,? said C Ramakrishnan, president and chief financial officer, Tata Motors.
Tata Motors? domestic sales, which contribute about 12% to consolidated sales, remained muted during the quarter on the back of low industry demand. Though cautious, the company anticipates some recovery in sales of the Nano owing to the recent launch of newer variant. Further, the company expects the recent 18 launches at Auto Expo to bring in favourable sales in the current calendar year.
The company said the domestic market will continue to remain sluggish in FY14 and the slowdown may trickle down into the early months of FY15. ?It’s a fairly difficult environment as we go out in the year. The passenger vehicle industry?s decline of around 6% may come down further,? said Ranjit Yadav, president ? passenger vehicles, Tata Motors.
In contrast, both wholesale and retail volumes at JLR saw double-digit growth, boosted by the demand for Jaguar models, including the new Range Rover Sport, Range Rover, F-Type which began shipping in May and higher volumes for the newer XF and XJ derivatives. Wholesale and retail volumes during the period jumped 22.7% and 26.5%, respectively, over the same period last year and stood at 116,357 and 112,172 units, respectively.
JLR?s net profit during the quarter surged 109% from the same period last year to GBP 619 million . Revenues during the quarter surged 40.1% to GBP 5,328 million.
Sales (including exports) of commercial and passenger vehicles stood at 1,32,087 vehicles, a decline of 35.7% from the same quarter last year. Commercial vehicle sales during the quarter declined 38.1% to 86,047 units on a year-on-year basis. Passenger vehicles sales also declined 36.3% during the quarter to 34,829 units.
