Tata Motors on Tuesday missed Street estimates with a surprise 56.2% drop in January-March net profit at Rs 1,716.5 crore. The company had posted a net profit of Rs 3,918 crore in the same quarter last year. Analysts had estimated a profit of Rs 4,095 crore. The sharp decline was largely due to higher depreciation, marked-to-market unmatured hedges as well as lower profit from luxury unit Jaguar Land Rover.
Consolidated net sales, however, rose 4% to 67,298 crore while consolidated revenue increased 3.5% to Rs 67,576 crore due to an increase in wholesale volumes and a richer product mix both at the standalone business and at JLR.
Operating profit (Ebitda) declined 15.61% to Rs 8,439 crore and margin declined 280 basis points to 12.5%.
For FY15, the company’s net profit was a tad lower at Rs 13,986 crore while revenue rose 12.9% to Rs 262,796 crore.
JLR’s net profit also fell 32.7% to £302 million against £449 million in the same period last year. Revenues grew 8.9% to £5,826 million.
Operating profit was up 10.4% at £1,016 million and margin expanded 20 basis points to 17.4%. “Continued strong revenue and operating performance were driven by increased wholesale volumes, solid product mix supported by the ongoing success of Range Rover Sport, Range Rover and Jaguar F-TYPE and strong market mix with sales growth in the UK, US, China, Europe and Asia Pacific partially offset by unfavourable operational foreign exchange net of realised hedges,” the company said.
Tata Motors’ domestic business saw losses widen to Rs 1,164 crore during the quarter while revenue increased 26% to Rs 10,784.2 crore on improvement in medium and heavy industrial commercial vehicle (MHICV) and passenger vehicle (PV) segments. “In the MHICV segment, improved freight availability and improved profitability of truck operators, fleet replacement demand mainly in the high tonnage segment, supported the company sales growth in this segment,” the company said. However, light commercial vehicle (LCV) segments continued to remain weak. As a result, overall cv sales were almost flat in Q4, it said. Operating profit stood at Rs 159 crore against a loss of Rs 637 crore in the corresonding period last year, with margin at 1.4%.
In passenger vehicles, the company said the Zest, and the newly launched Bolt, continued to receive an encouraging response. These led to the passenger vehicle segment growing 19.1% in Q4, with the car segment expanding 33%, the company said.
For the first time in many years, Tata Motors did not pay a dividend to shareholders for FY15. “Considering the continued weak operating environment in the standalone business, and in view of the losses for the year no dividend is permitted to be paid to the members for FY15,” it said.
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