The Hindu Business Line : Tata Motors Q3 net up 46 pc — Continued cost reduction, higher sales lift profit

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Tata Motors Q3 net up 46 pc — Continued cost reduction, higher sales lift profit

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Mr Ravi Kant, Managing Director, said that the price of steel had eased in the spot market but would take time to reflect in the company's long-term contracts.

Mumbai , Feb. 9

TATA Motors Ltd on Thursday reported a 45.54-per cent rise in profit after tax for the quarter ended December 31, 2005, at Rs 460.23 crore from the previous corresponding Rs 316.21 crore.

Net sales/ income from operations moved up 16.31 per cent to Rs 5,074.55 crore (Rs 4,362.82 crore).

Operating profit increased 7.22 per cent to Rs 623.06 crore (Rs 581.12 crore). Courtesy rising interest rates and ongoing capital expenditure, both net interest and depreciation were higher for the quarter.

While profitability was helped by continued cost reduction measures and overall vehicle sales for the quarter up 12.74 per cent to 1,11,228 units (98,662 units), other expenditure - including a foreign exchange loss of Rs 38.63 crore (gain of Rs 62.08 crore) - rose 37.69 per cent to Rs 745.09 crore (Rs 541.13 crore).

Total expenditure increased 17.71 per cent to Rs 4,451.49 crore (Rs 3,781.70 crore). Compensating was a 582.72 per cent gain in other income to Rs 168.36 crore (Rs 24.66 crore), which included Rs 164.30 crore profit on the sale of shares at Telcon.

Subsidiaries' performance: The company's subsidiaries also did well, Mr Praveen Kadle, Executive Director, said at a press briefing.

For the nine-month period, Tata-Daewoo reported a 175-per cent growth in PAT to Rs 45.8 crore (Rs 16.7 crore) on a 26 per cent rise in turnover to Rs 1,109.2 crore (Rs 878.6 crore).

Tata Technologies returned a 253-per cent increase in PAT to Rs 14.6 crore on a 153 per cent gain in turnover to Rs 329.3 crore.

During April-December 2005, Tata Motors' PAT moved up by 26.15 per cent to Rs 1,070.77 crore (Rs 848.78 crore) on a 13.57 per cent growth in net sales/ income from operations to Rs 13,719.45 crore (Rs 12,080.26 crore).

Mr Ravi Kant, Managing Director, Tata Motors said that the price of steel - a major raw material - had eased in the spot market but would take time to reflect in the company's long-term contracts.

Had it not been for road development and interest rates, still at 7-8 per cent (compared to 20 per cent in the last industry cycle), the current bearishness in truck sales would have hit harder.

The commercial vehicles market has been subdued for the three reported quarters of FY06.

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