India’s Tata Motors quarterly profit soar 71%

A worker cleans a Tata Motors logo in Hyderabad

India’s Tata Motors said Friday its quarterly net profit surged by a surprise 71 percent as a robust performance by its British luxury marque Jaguar Land Rover offset a dive in domestic sales.

The country’s top vehicle maker has become heavily reliant on revenues from JLR which it bought for US$2.3 billion from Ford in 2008 at the height of the global financial crisis.

But the purchase, seen by auto analysts at the time as a risky gamble for the Indian company, has paid off dramatically for Tata Motors.

The auto giant, which also makes the low-cost Nano hatchback, reported that consolidated second-quarter net profit climbed to 35.42 billion rupees (US$558 million) from 20.75 billion rupees a year earlier.

British unit Jaguar Land Rover’s after-tax profit for the three months to September soared by 66.2 per cent to 507 million pounds (US$811 million).

“The weak operating environment in the India business was more than offset by the increase in wholesale volumes and richer product and market mix at Jaguar Land Rover,” the company said in a statement.

The profit increase for the three months to September was the first in four financial quarters to be posted by Tata Motors. The profit far outstripped market consensus forecasts of around 25 billion rupees.

Total revenues of Tata Motors, part of the giant steel-to-software Tata Group led by chairman Cyrus Mistry, jumped 31 per cent to 568.82 billion rupees.

Jaguar Land Rover’s sales climbed an overall 21 per cent to 102,644 units in the quarter, according to the statement.

Jaguar deliveries climbed 56.5 per cent to 20,024 units. Land Rover sales increased 14.8 per cent to 82,620 vehicles.

But in India, demand for new cars has slowed rapidly due to high borrowing costs, worries over a sharp slowdown in the economy and costly fuel prices have kept buyers out of showrooms, hitting Tata’s domestic revenues.

On a standalone basis, Tata Motors’ India operations swung to a net loss of 8.04 billion rupees in the second quarter compared with a net profit of 8.67 billion rupees in the same period a year earlier while sales slumped 29 per cent to 8.76 billion rupees in the period.

“A 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,” Tata Motors said.

India’s economy has been growing at a decade low of five per cent, putting the brakes on the once-red hot domestic car market.

 

 

Source : Channel News Asia | November 8, 2013

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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One Response to India’s Tata Motors quarterly profit soar 71%

  1. twitter.com says:

    Yes, completely agree. You have struck the nail on the head completely

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