Tata Motors, India’s biggest automobile manufacturer, is hoping for a better second half of the current fiscal on the back of strong product plans.
Announcing its second quarter financials on Wednesday, the company admitted its first half was weak. Its UK subsidiary Jaguar Land Rover (JLR), however, maintained a positive run on the back of strong sales of Range Rover Evoque and Range Rover Sports.
The company will launch six new models in the passenger car segment and 25 models in the commercial vehicle (CV) space in the second half in order to bring back momentum in its domestic sales, which have been hit by increasing competition and slow economic growth.
“With festive season and better consumer sentiment, we believe that there will be some uplift in the demand in the second half,” said a senior company official.
“We have a pipeline of new product launches in all segments, including refreshes. We will make sure we enter all segments that are currently driving the volumes,” said Karl Slym, managing director, Tata Motors.
Driven by light commercial vehicles, Tata Motors’ domestic CV sales grew 4.8% at 136,353 units over the corresponding period last year. Passenger vehicles sales rose 11.6% at 72,603 units.
Tata Motors consolidated net profit grew lower-than-expected to 10.55% year on year to `2,075 crore in the second quarter of the current fiscal.
Revenue increased 20% to `43,403 crore during the reporting quarter over the year-ago period. JLR revenues for the quarter stood at £3.29 billion, a growth of 12.8% compared with £2.91 million in a year-ago quarter.
The operating margin for its domestic business fell to 5.9% for the quarter from 7.2% in the year-ago period.
Tata Motors, which depends on JLR for 90% of the group’s profit, said the iconic British brand’s operating margin stood at 14.8% in July-September, down from 14.9% a year earlier.
“The second-quarter numbers are below expectations on a net profit level, while on an operating level it is marginally lower. With aggressive plans, we expect the company’s second half to be better than the last year,” said an analyst with a domestic brokerage.
Tata Motors’ shares ended 0.9% higher ahead of earnings announcement at `269.35 on Wednesday.