Tata Motors on Thursday posted a nearly three-fold jump in its consolidated net profit at Rs 2,503 crore on a year-on-year basis for the three months ended September 30, 2017, beating Street estimates. The impressive rise was on account of higher sales volumes across all vehicles segments as well as its luxury offering Jaguar Land Rover. Net sales during the period were up more than 10% y-o-y to Rs 70,156 crore, way above analysts’ estimates, with sales of commercial and passenger vehicles, including exports, increasing 14% to 1.53 lakh units. Growth was witnessed across segments – 28% in MHCV, 35% in LCV and 38% in SCV and pick-ups. The passenger vehicles segment grew 14.4% versus the corresponding quarter last year, with new products such as Tiago, Tigor, Hexa and compact SUV Tata Nexon driving the sales momentum. Strong customer demand for JLR’s Range Rover Velar and other new models also contributed to higher sales.
With the rise in sales volumes, the consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) surged close to 19% y-o-y to Rs 9,703 crore during the quarter. The EBITDA margin were up by 90 basis points to nearly 14%. At the standalone level too, the company improved its performance by narrowing the net loss to Rs 295 crore against a net loss of Rs 631 crore in the year-ago period. Standalone net sales stood at Rs 13,400 crore, a sharp rise of 30% on a y-o-y basis. Guenter Butschek, managing director and CEO, Tata Motors said, “After a challenging first quarter, Tata Motors has demonstrated impressive results with month-on-month growth in sales and market share, enabled by a slew of new product launches and customer centric initiatives. With our turnaround plan in full action, we are seeing encouraging results and we will continue to drive sustainable profitable growth to meet our future aspirations”.
He added that the company will fill product gaps in its portfolio, reduce costs across its product line and consolidate its supply chain. The company’s commercial vehicles business market share grew by 1.7% y-o-y and 3.9% q-o-q during the quarter under review. Positive market sentiments post the GST regime, government funding in infrastructure development and restrictions on overloading with a higher demand of high tonnage vehicles contributed to the growth story, the company said in a statement. Speaking at an earnings press conference, Girish Wagh, head of commercial vehicle business unit at Tata Motors, said: “We see the market growing even in the second half of the fiscal year. As far as the margins are concerned, we have a strong pipeline going ahead and some aspirational targets.” Meanwhile, Jaguar Land Rover’s profit before tax was up by 38% y-o-y to £385 million. Revenues grew by 11.5% to £6.3 billion in the quarter.
JLR’s sales for the period rose 5% to nearly 1.50 lakh units, with growth remaining strong in China and the US offsetting lower sales in the UK and Europe markets. This was aided by the continued ramp-up of new models such as the Range Rover Velar, Land Rover Discovery, Jaguar XF Sportbrake, Jaguar F-PACE and, in China, the Jaguar XFL. Ralf Speth, chief executive of Jaguar Land Rover, said although the company is facing headwinds and uncertainty in some markets, JLR is well positioned to deliver further global expansion. As part of the company’s ongoing manufacturing expansion and new technology programme, JLR’s investment spending was more than £1 billion in Q2FY18, while the investment spending for the full year is expected to exceed £4 billion. Speth said in the third quarter, it will be offering Jaguar E-PACE and new plug-in hybrid Range Rover and Range Rover Sport as well as a key new model from its China joint venture.