The Hindu Business Line : Tata Motors clocks 18 pc growth in Q4 net, to pay Rs 13

MR RAVI KANT (right), Managing Director, Tata Motors, with Mr Praveen Kadle, Executive Director, at a press conference in Mumbai on Friday. - Paul Noronha

Mumbai , May 19

Tata Motors today reported 23.60 per cent growth in profit after tax for 2005-06 to Rs 1,528.88 crore from Rs 1,236.95 crore in the previous year.

Net sales/income from operations clocked 18.27 per cent rise to Rs 20,602.20 crore (Rs 17,419.13 crore).

The board has recommended a dividend of Rs 13 per share.

For the last quarter of the fiscal gone by, the company posted 18.02 per cent rise in profit after tax to Rs 458.11 crore (Rs 388.17 crore) on 28.92 per cent increase in net sales/income from operations to Rs 6,882.75 crore (Rs 5,338.87 crore).

Of the total revenues, exports accounted for 16 per cent (14 per cent).

Speaking to newspersons, Mr Praveen Kadle, Executive Director, said that the fiscal had been a challenging one with slower growth in industry sales, higher input costs, rising fuel price, market disruptions caused by floods and at year's start, confusion over emission norms.

Industry growth rate in truck sales had decelerated from 36.4 per cent in 2003-04 to 10.1 per cent in 2005-06; similarly for passenger vehicles from 27.6 per cent to 7.8 per cent.

Critically, the 2005-06 truck market growth would correct to 0.7 per cent if sale of Tata Motors' mini truck, the Ace, were removed from numbers.

During the year, Tata Motors was forced to address the competitive car market; senior officials conceded that it had to compensate dealers for price cuts.

However, the company's EBITDA margin was held at 12.52 per cent (12.46 per cent) and against 2005-06 target of Rs 300 crore in cost reduction, Rs 471 crore lopped off.

Key subsidiaries did well, among them Tata-Daewoo with profit after tax of Rs 58.3 crore (Rs 22.5 crore) on turnover of Rs 1,585 crore (Rs 1,178 crore) and Telcon with profit after tax of Rs 86.8 crore (Rs 40.8 crore) on turnover of Rs 1,290 crore (Rs 926.3 crore). Inorganic growth took Tata Technologies' revenues to Rs 545 crore (180.4 crore) with profit after tax at Rs 11.6 crore (Rs 7.7 crore).

Mr Kadle said that while economic development promised better industrial production and infrastructure in the current fiscal, worries remained in the garb of oil price, continued pressure on input costs, and liquidity crunch/interest rate movements.

The company scrip fell by Rs 24 to Rs 848.90 on the BSE on Friday.

Small car plant

According to Mr Ravi Kant, Managing Director, the proposed small car plant in West Bengal would have "reasonably-sized capacity," adequate to meet demand in the initial years.

However, given the management's previously stated view that eventual capacity for the car could touch a million units, it may end up as one of a few manufacturing locations for the vehicle.

Regarding the Tata Motors-Fiat relationship, he said that the companies were exploring several options including sharing of platforms.

At a consolidated level, Tata Motors clocked 25 per cent growth in 2005-06 in profit after tax to Rs 1,728.09 crore (Rs 1,385.34 crore) on 21 per cent increase in net revenue to Rs 23,718.17 crore (Rs 19,532.84 crore).

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