Tata Motors on Monday said its net profit grew 58% to Rs 513.76 crore for the first quarter ended June 30, compared with Rs 326.11 crore a year earlier, on a stand-alone basis (ie, excluding Jaguar Land Rover acquired in 2008).
The better-than-expected performance was largely driven by a one-time income of Rs 319.36 crore following its divestment of shares in group firm Tata Steel to pre-pay foreign currency loans. A 24% reduction in raw material costs, a cut down on inventory and an improvement in sales realisation also helped, resulting in an operating margin of 11.4%, compared with 7.1% a year earlier.
Tata Motors? revenues for the quarter stood at Rs 6,404.63 crore, a decline of 7.6% vis-?-vis Rs 6,928.44 crore in the same quarter last year. It generated revenues of Rs 2,000 crore in April-June from the Nano, which it launched earlier this year. For the quarter, Tata Motors recorded a notional foreign exchange valuation loss of Rs 5.54 crore, against Rs 161.59 crore in the same quarter last year.
This was aided by a change in accounting rules by the government, which in March allowed companies to alter provisions for mark-to-market losses on foreign currency loans. The company?s expenditure on raw materials and components dipped to Rs 3,801.94 crore in the quarter versus Rs 5,025.13 earlier.
Tata Motors vice-chairman Ravi Kant said, ?The market is undergoing a challenging period and the domestic market has performed well. The income from Tata Steel has helped us to provide a better product mix and increase the sale of our new products. Besides this, cost-cutting measures and stabilising commodity prices are also some of the reasons for the better performance.?
Tata Motors shares rose marginally on the BSE to close at Rs 374.95 on Monday.
CFO C Ramakrishnan said, ?In the first quarter of 2009, the overall commercial and passenger vehicles sector saw an improvement of 9.2%, while Tata Motors saw an improvement of 1.4%. In the commercial vehicles segment, volumes increased by 1.1% in the domestic market. Regions like the north and east have shown good signs of stability, while east and south continue to remain weak.?
Meanwhile, the company improved upon its marketshare in the commercial vehicles segment to 67.4% in the quarter ended June 30, compared with 61% in the same quarter last year. The marketshare for Tata passenger vehicles improved to 12.5%.
The Indica Vista increased its marketshare in the small car segment from 10.8% to 11.1%, despite other six entries.
?We hope to sell higher volumes of the Indica Vista, Nano, Fiat Linea, Grande Punto and JLR in the coming months. Launches for the new Indigo and Crossover are scheduled in the second half of 2010, while retailing of the World Truck will start from next month,? Ravi Kant said.