1. Tata Motors misses estimates, profit plunges 57%

Tata Motors misses estimates, profit plunges 57%

Tata Motors on Friday missed estimates on the net profit front during the April-June quarter, posting a 57.2% decline on a year-on-year basis at R2,236 crore, mainly due to foreign exchange losses after Britain’s decision to leave the European Union, which offset the higher sales at its luxury unit Jaguar Land Rover (JLR).

By: | Mumbai | Published: August 27, 2016 6:17 AM
However, the company fared better than expected on the revenue front and standalone performance, while JLR margin was in line with estimates. (Reuters) However, the company fared better than expected on the revenue front and standalone performance, while JLR margin was in line with estimates. (Reuters)

Tata Motors on Friday missed estimates on the net profit front during the April-June quarter, posting a 57.2% decline on a year-on-year basis at R2,236 crore, mainly due to foreign exchange losses after Britain’s decision to leave the European Union, which offset the higher sales at its luxury unit Jaguar Land Rover (JLR).

However, the company fared better than expected on the revenue front and standalone performance, while JLR margin was in line with estimates.

Consolidated revenue during the period increased by 9% at R67,056 crore, driven by strong sales volume growth in all regions for JLR and continued growth in the medium and heavy commercial vehicles (M&HCV) and light commercial vehicle (LCV) segments.

The company sold 1.34 lakh units of Jaguar Land Rover, up 17% YoY during the quarter due to the Jaguar F-Pace and XE, while domestic sales increased 7% led by 10% growth in commercial vehicle business.

Consolidated Ebitda decreased by 30.83% YoY to R7,612.93 crore, while operating margins declined to 11.35% from 17.89% in the corresponding quarter last year.

The company made a forex loss of R5.41 crore as opposed to a gain of R643.18 crore during the same period last year.

The consolidated other expenses increase by 48% YoY to R15,038.54 crore, while the depreciation and amortisation expenses increased by 21.62 % YoY to R4,550.82 crore.

The product development cost during the quarter increased by 23.48 % YoY to R871 crore

JLR’s profit during the quarter declined 38.2% to £304 million but revenue increased 9.2% to £5,461 million compared to a year-ago period.

Operating profit (Ebitda) was down by 18.1% to 672 million pound and margin contracted by 410 basis points at 12.3%, impacted by forex fluctuation and lower local market incentive.

“The operating performance in the quarter reflected the overall higher wholesales, offset by adverse forex impact of 207 million pound including revaluation of $84 million, mainly EUR payables resulting from depreciation in the pound following the Brexit vote,” the company said.

The company’s net profit on a standalone basis declined 91.1% to R25.8 crore but revenue increased 10.2% to R11,464.7 crore during the period.

The standalone operating profit increased 22% to R574 crore and margin expanded by 60 basis points to 5%.

The company informed the BSE that its board of directors has approved the resolution for raising funds by way of issue of secured/unsecured debentures and/or bonds aggregating R3,000 crore in one or more tranches.

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