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Driven largely by sales from Jaguar Land Rover (JLR), Tata Motors posted an expectations-beating 70.7 per cent rise in consolidated net profit for the quarter ended September. However, on a standalone basis, the country’s largest automaker by revenues posted a net loss.
The Tata Group company posted a consolidated net profit of Rs 3,542 crore in the second quarter (Rs 2,075 crore in the year-ago period). Its revenues rose 31.1 per cent to Rs 56,882 crore (Rs 43,404 crore). JLR posted a 66 per cent rise in net profit at £507 million (£305 million) for the quarter. Analysts had expected the company to report a 50 per cent rise in net profits.
“The surge in profits is due to the high operating margins at JLR. This year, JLR has been maintaining sales and momentum with new launches and upgradation in product portfolio, including the Range Rover Sport,” said Rikesh Parikh, Vice-President, Institution Corporate Broking at Motilal Oswal Securities.
STANDALONE NET
Tata Motors posted a net loss of Rs 804 crore (profit of Rs 867 crore in the year-ago quarter) during the quarter as last year it received dividend from JLR, its Chief Financial Officer C. Ramakrishnan said.
“There were a number of segments where we didn’t have products, which had posted growth this year. So, we were impacted,” said Tata Motors Managing Director Karl Slym. The commercial vehicle industry fell in July-Sept quarter, led by a 34 per cent fall in the cyclical medium and heavy truck segment.
Restructuring plans
Tata Motors is also looking at restructuring its overseas companies into a single holding company, Ramakrishnan said, declining to provide details. The company, which has a net debt of Rs 19,000 crore, is also looking at refinancing some of its debt.
The company expects a subdued growth in the domestic market. “The economy’s growth is expected to be subdued throughout this financial year, and sales of CVs would also remain subdued,” Ramakrishnan added.
However, the better-than-expected monsoon, introduction of new variants and exploring new shores for exports would be beneficial to the company. “We expect and hope that the right kind of things happen with the economy,” Slym added.
On Friday, Tata Motors’ shares closed up 1.29 per cent at Rs 385 on the BSE.
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