Tata Motors on Tuesday said its consolidated net profits had fallen 17% year-on-year to Rs4,295.9 crore for the quarter ended March. The numbers surpassed Bloomberg consensus analyst estimates of Rs2,575.9 crore. The automobile major’s net revenues, which were lower by 2.9% y-o-y at Rs77,272 crore, came in a shade below estimates.
The company said sales of commercial vehicles were yet to revive post demonetisation. “Replacement demand has been low and continues to be so. Also pre-buying before the implementation of BS IV was lower than expected,” Ravi Pisharody, executive director, said.
The company said Jaguar Land Rover (JLR) net profit for the quarter was up 18% (y-o-y) to £557 million on the back of a 10.1% (y-o-y) rise in revenue to £7.3 billion and expansion in earnings before interest, taxes and depreciation and amortisation (EBITDA) margin to 14.5%.
On JLR, Tata Motors said, “Retail sales including the China JV in the quarter were 179,509 units, up 13% on strong demand across the product portfolio, primarily reflecting higher volumes in China, North America, UK and Europe led by strong sales of F-PACE, Range Rover and Discovery Sport.”
Ralph Speth, CEO at JLR, said the company will spend about £4 billion in capex in FY18, which will include its investments in the new plant in Slovakia. He said the company will continue to strive to have an EBIT margin of 8-10% in the medium term.
A weak pound post Brexit, however, continued to play a spoilsport in Tata Motors’ consolidated numbers during Q4 as they have done for the previous quarter and saw the full year comprehensive income being pushed into the negative “Consolidated revenues and consolidated profit after tax for the year are lower by Rs27,686 crore and Rs1,074 crore, due to translation impact from GBP to INR,” the company said.
At a standalone level, while the M&HCV and LCV segments saw a drop in sales volume, the passenger vehicle segment grew 44.3% (y-o-y), leading to an overall growth of 4.9% (y-o-y) to 1.51 lakh units. As a result, standalone net sales rose 6.1% (y-o-y) to Rs13,621 crore. However, higher interest expense and exceptional expenses of Rs288.3 crore, including Rs147.9 crore due to provisions made for existing inventory of BS III vehicles, saw the company reporting a standalone net loss of Rs829 crore as compared to a profit of Rs398 crore in Q4FY16.
During the quarter, Tata Motors also changed its accounting principle for forex translation gains and losses in order to reduce volatility in the P&L statement. “Accordingly, it was considered more appropriate to present realised foreign exchange relating to the hedging of revenue and costs exposures as an adjustment to revenue and costs for Q4 FY17 and FY17. Foreign exchange gain/(loss) unrelated to hedging are presented separately as a line item in the results. The prior period figures have also been reclassified on this basis,” the company said.