Hit by weak consumer demand in the domestic market, Tata Motors on Wednesday missed analysts estimates by reporting a 24% decline in its consolidated net profit at R1,762.8 crore during the April-June quarter. The company had posted a net profit of R2,313 crore in the same period last fiscal. The maker of passenger car brands like Tata Indica and Tata Safari cited weak macroeconomic environment and increased competitive intensities behind the slowdown in sales.
The company?s consolidated total income from operations during the period surged 8% to R46,784.6 crore, against R43,323.6 crore in the same period last fiscal; beating analyst expectations of R45,700 crore.
?Jaguar Land Rover continues to drive the volume growth on the back of strong demand and improved performance,? Tata Motors CFO C Ramakrishnan said at a press conference.
The company?s managing director Karl Slym, who joined Tata Motors in September 2012, was not present during the earnings conference.
On a standalone basis the company had a net profit of R703 crore, against R205 crore, after considering dividend from subsidiaries amounting to R253 crore. Standalone total income from operations during the period under review declined 14% to R9,104.5 crore, against R10,586.4 crore in the year-ago period. The slump was seen as a result of rising competitive intensities and pressure on pricing.
The sales (including exports) of commercial and passenger vehicles for the quarter ended June stood at 154,352 units, a decline of 19.0% as compared to the corresponding quarter last year.
The operating margin during the quarter slumped to 2.3%, compared with 7.3% for the same period last fiscal.
The company?s British arm JLR?s net profit for the quarter surged 28.8% to R2,838 crore, against R2,203 crore in the corresponding quarter last year. Revenues for the same quarter surged 12.6% to R38,249 crore.
JLR retail sale for the quarter under review grew 10.4% over corresponding period last year to 94,719 units. Following strong response to its new products and powertrain options, Jaguar retail volumes grew 28.0% to 17,459 units, against 13,638 units during the last quarter.
Tata Motors? executives said its capex projections to bring in newer products in the commercial and the passenger vehicle space of about R3,000 crore given earlier during the year will be maintained. The company said its ?horizon next? campaign has started showing results and it expect passenger vehicles sales to surge during the festival season.