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Auto major Tata Motors reported a 50-per-cent year-on-year fall in its consolidated net profit for the March quarter to ₹2,176 crore compared with ₹4,336 crore in the same period last year as JLR faced major headwinds in UK.
Revenue from operations stood at ₹91,279.09 crore in the quarter under review compared with ₹78,746 crore last year. The two figures are not comparable due to GST implementation last year, after which the revenue from operations is reported net of GST.
On a standalone basis, Tata Motors reported a loss of ₹499 crore compared with a loss of ₹805 crore in the same quarter last year. Standalone revenue from operations stood at ₹19,779 crore (₹15,080 crore).
“In FY18, JLR delivered profitable growth despite challenging market conditions. In the near term, the challenges of market, technology and geo-political uncertainties are likely to persist. Looking ahead, we will draw inspiration from this proven legacy to create value over the long term and drive each of these further. We will also focus on cost efficiencies, drive operating leverage and manage capital spends prudently,” Natarajan Chandrasekaran, Chairman, Tata Sons and Tata Motors, said in a statement.
In the quarter, Tata Motors took a one-time charge of ₹1,236 crore as it decided to shut down work on several models on which the work has started but the company felt they would not be profitable. This included the Tata Motors’ famed initiative of TaMo.
Tata Motors standalone sales jumped 36 per cent to 204,255 units in the fourth quarter against 150,448 units in the same period last year. Domestic sales were up 39 per cent at 187,874 units from 135,416 units.
Brexit impact
Jaguar Land Rover, which contributes close to 90 per cent of Tata Motors’ revenue faced major headwinds in the UK with the impact of Brexit and increased taxes on diesel cars. Strong retail sales, particularly in China and North America, however, helped JLR somewhat offset the weakness in Europe.
Ralf Speth, CEO, Jaguar Land Rover, said: “Despite external headwinds, these results reflect the underlying strengths of Jaguar Land Rover. Sales have reached a new high, as strong demand in our key overseas markets offset the challenging conditions in the UK and other parts of Europe.”
JLR’s revenue for the quarter ended March came in at £7,555 million, 4 per cent higher than in the same quarter last year. Its pre-tax profit, however, fell 46 per cent over the period to £364 million. JLR’s EBITDA margin fell to 12.2 per cent from 14.4 per cent a year ago.
Guenter Butschek, Tata Motors CEO & MD, said the turnaround plan for Tata Motors is not done yet and the company will be entering into Turnaround 2.0.
“As we step into Turnaround 2.0, we would like to embed Turnaround thinking within TML and our business plan will continue to remain robust in terms of sales, market share and financial performance. We want to structurally improve the business with reinforced and focussed actions in PV, and continuing the momentum in CV from last year. We will continue to enhance the organisation’s effectiveness, enabling greater speed, simplicity and agility in our efforts,” he said.
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