Tata Motors's domestic business posted a loss of Rs 829 crore compared with a profit of Rs 398 crore in the year ago quarter
Hit by demonetization, Tata Motors on Tuesday reported a 16.8% year-on year fall in its consolidated net profit in the fourth quarter at Rs 4,336 core despite good performance by Jaguar Land Rover (JLR) business.
The profit was hit by loss in domestic business and loss from conversion from British Pound to rupee. JLR reported a 13% jump in its retail sales across China, North America, UK and Europe.
Tata Motors's domestic business posted a loss of Rs 829 crore compared with a profit of Rs 398 crore in the year ago quarter. The company took a one-time hit of Rs 148 crore on unsold stock of older technology Euro III-compliant vehicles after a surprise court order banned their sale after March 31.
Guenter Butschek, CEO & MD, Tata Motors, said, "It has been a challenging and highly volatile year, which followed a period of low demand and inconsistent recovery in the prior years in the automotive sector in India. In addition, the company also underperformed on many fronts, amplifying the impact of the external environment. On the way forward, we have detailed actions under focused implementation, and expect to significantly enhance the overall business performance in the coming periods."
The commercial vehicle (CV) segment witnessed muted interest due to weak replacement demand and subdued freight orders from industrial segment. This took further hit on account of demonetization and lower-than-expected pre-buying ahead of the implementation of BS IV. Even medium and heavy CV segment witnessed a fall of 2.2% yoy and light CV segment witnessed a fall of 6.1% yoy.
In contrast, passenger vehicles segment grew 44.3% yoy with the car segment growth of 42.8% yoy and utility vehicles (including Vans) segment growth of 51.7% yoy, on the back of strong response to the Tiago and the launch of Tata Hexa and Tata Tigor.
Quarterly net profit at JLR, which has been propping up profits at the Indian automaker for several years, rose 18% year-on-year to 557 million pounds.
The unit's revenues rose 10% to 7.27 billion pounds while its margin on earnings before interest, tax, depreciation and amortisation (Ebitda) rose to 14.5% during the quarter from 9.3 percent in the previous quarter.
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Guenter Butschek, CEO & MD, Tata Motors, said, "It has been a challenging and highly volatile year, which followed a period of low demand and inconsistent recovery in the prior years in the automotive sector in India. In addition, the company also underperformed on many fronts, amplifying the impact of the external environment. On the way forward, we have detailed actions under focused implementation, and expect to significantly enhance the overall business performance in the coming periods."
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