The Hindu Business Line : Tata Motors PAT up 122 pc

TATA Motors Ltd today reported a 122.66 per cent rise in profit after tax for the quarter ended June 30, 2004, to Rs 223.36 crore against Rs 100.31 crore posted in the previous corresponding period.

The board has approved a proposal to list the company's outstanding Global Depository Receipts (GDRs) on the New York Stock Exchange (NYSE) in the form of American Depository Receipts (ADRs). There will not be any new share issue or capital raising as part of the listing slated for this fiscal.

"The listing was a component of our plan to go global,'' Mr Praveen Kadle, Executive Director, Tata Motors, said.

NYSE is perceived to be the right international bourse for listing an automobile and engineering company and Tata Motors is scheduled to be the first Indian player from the category to do so.

There will be a marginal cost for converting the GDRs to ADRs.

The company's first quarter net sales/income from operations was up 42.82 per cent to Rs 3,574.08 crore (Rs 2,502.44 crore for the year ago period). Driven by returns from surplus cash, other income was Rs 41.24 crore (Rs 10.49 crore).

According to Mr Kadle, the surplus cash is deployed in mutual funds, deposits and vehicle financing, its end June size of Rs 3,713 crore exceeding the company's debt by Rs 604 crore compared to Rs 548 crore in March 2004.

Negative working capital continues, inventories are down to 34 days (42 days) and receivables are at nine days (24 days). The combined turnover of Tata Motors' six key subsidiaries was Rs 652 crore (Rs 224 crore) with a profit-before-tax of Rs 48 crore (Rs 5 crore). Tata-Daewoo Commercial Vehicle had a turnover of Rs 339 crore and a profit-before-tax of Rs 19.3 crore.

Though total vehicle sales touched 84,918 units (60,396 units) and there was a price revision in May (truck prices hiked by 1.5-2 per cent), operating margins were hampered a bit courtesy input cost increases.

Majority of the cost increase is being borne by the company, Mr Ravi Kant, Executive Director, confirmed. Tata Motors would like to desist as far as possible from passing on these costs to the market and is seeking ways to further contain production cost.

According to him, even as the quarter's figures look appealing given the lower base of the year ago period, growth rate could slacken in the months ahead. Contributing to this scenario are a host of concerns including fuel price revision, interest rate scenario, condition of the stock market and critically, effectiveness of the monsoon.

Specifically on trucks, poor rains could slow down the overall economic growth while its impact on grain movement remains to be seen. Both Mr Ravi Kant and Dr V. Sumantran, Executive Director, said the shortfall in rains do not pose an immediate threat to vehicle sales, but deserves to be watched.

The plant capacity at Pune is being raised and should be up 50 per cent by year-end.