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 international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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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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