A good performance in China helped Tata Motors report a 12.2% year-on-year increase in consolidated net profit of R2,244.91 crore in the three months to June, 2012. The bottom line was, however, impacted by a one-time loss of R441 crore on account of a weak rupee. Consolidated revenues grew by 30.1% y-o-y to R43,324 crore driven by strong growth in volumes of new products and a favourable market mix at Jaguar Land Rover.
However, domestic operations of India?s largest truck and bus maker and owner of Jaguar and Land Rover were somewhat disappointing. Standalone profit fell 48% y-o-y to R205 crore on the back of a drop in revenues which came off by 8.9% y-o-y to R10,586 crore. Standalone operating margins came in at 6.6%, down approximately 300 basis points sequentially.
?The real impact this quarter was the medium and heavy truck segment which suffered from a drop in demand,? said Ravi Pisharody, executive director ? commercial vehicles business, Tata Motors. ?It is a cyclical segment and this quarter we have seen the impact of weak demand primarily because of the low economic activity.?
The management observed that weak macroeconomic parameters, excise duty increases and poor availability of freight had resulted in pressures on volumes in the medium and heavy commercial vehicle segment.
Tata Motors? sales during the quarter including exports, commercial vehicles and passenger vehicles but excluding Jaguar Land Rover was down 3.6% y-o-y to 1,90,483 units. Jaguar Land Rover sales during the quarter grew 34.4% to 83,452 units. China finally became the No.1 market for Jaguar Land Rover, contributing for 22.2% of unit sales. Operating margins for the JLR business remained flat sequentially at 14.5% in the June quarter, in a difficult environment. The British luxury car maker?s plans to start a factory in joint venture with Chinese partner Chery Automobiles is awaiting a final regulatory approval from the Chinese government. The company remains bullish about prospects in the country.
?China is overall very strong and we have a very low market share there; so, we are confident that we can grow very fast,? said Ralf Speth, chief executive officer, Jaguar Land Rover. ?In the fourth quarter of the last fiscal, we had brought in the deferred tax assets in Jaguar Land Rover, so from now on the tax expense on the profit and loss account will be higher although the same isn?t true for the cash outgo due to tax,? explained C Ramakrishnan, CFO, Tata Motors. ?This is why the growth in net profit is lower than the growth in revenue.? Standalone profit was further impacted negatively by Rs 161 crore on account of weak rupee.
