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Domestic ops drag down profit of Tata Motors

Friday, 30 May 2014 - 9:35am IST | Place: Mumbai | Agency: dna

Tata Motors, the biggest commercial vehicle manufacturer and the owner of the British luxury carmaker – Jaguar Land Rover (JLR), on Thursday reported a marginal decline in consolidated net profit in the fourth quarter of FY14, mainly on account of the slowdown in company's Indian operations. The company reported a consolidated net profit of Rs 3,918 crore in Q4 of FY14, as compared to Rs 3,945 crore for the corresponding quarter of the previous year, registering a decline of 0.7%.

However on a standalone basis, its domestic operations continued to remain challenging on account of slower demand for Tata passenger vehicles and slowdown in the commercial vehicle (CV) industry. The company reported a loss of Rs 817 crore in the reporting quarter, as compared to a loss of Rs 312 crore in the same quarter previous year, registering its sixth straight loss for the standalone entity.

Its Ebitda margins slipped into a negative of 6.2% during the quarter, compared to 3.5% in the same period in the previous year.

The domestic sales of CVs and passenger vehicles for the quarter ended March 31, 2014, stood at 1,32,308 units, a decline of 33% as compared to the corresponding period last year.
Tata Motors said that it expects the industry as well as the company's volume to get better in the second half of the year. The company will launch its new vehicles Zest and Bolt in the passenger vehicle category, which is further expected to boost volumes going ahead. "Market sentiments are expected to improve, leading to positive impact in the second half for the industry as well as for the company. Sales are expected to show improvement," company's president and chief financial officer, C Ramakrishnan told reporters.

Tata Motors informed that its current average capacity utilisation is at around 45-70% across its 6-7 factories, depending on different segments.

The company also a declared a dividend of 150 million pounds from JLR, the effect of which will be visible in company's first quarter of the current fiscal (FY15).

JLR – its luxury car manufacturer continued strong performance on account of new launches and growth in markets like China. Profit after tax rose to pound 449 million in Q4 of FY14 versus, pounds 377 million in Q4 of FY13.

Its Ebitda margins grew to 17.2% during the quarter, compared to 16.2%. Company's share of China region grew to 24.2% during the quarter from 21.1%. The company said that its joint venture in China will be rolled out this year, but declined to give any timeline.

"We have produced our first car yesterday (Wednesday), but we will take time to train and educate on our quality," said Ralf Speth, chief executive officer for JLR.

The company is hopeful of continuing the growth on the back of new launches this year, including new Discovery Sport, Jaguar XE and strong demand of Range Rover Evoque.

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