Despite a poor show in the home market, a strong performance by Jaguar and Land Rover (JLR) helped Tata Motors report a sharp jump in consolidated profits, for the December 2010 quarter, of 273% year-on-year to Rs 2,424 crore. Consolidated revenues in the three months to December 31, 2010, rose 22% year-on-year to Rs 31,685 crore while the operatign profit margin was up 340 basis points at 15.2%. While revenues for the stand-alone entity were up a strong 28.4% year-on-year at Rs 8,974 crore, operating margins, were virtually flat at 10.4% leaving the net profit for the December quarter at Rs 410 crore, up just 2.5% year-on-year. C Ramakrishnan, CFO, Tata Motors said, ?Operating margins are under pressure due to the steep increase in the cost of raw materials. While we have increased prices by about 1.5% in the December quarter and also in the current quarter, input costs are a concern.?
PM Telang, MD, Tata Motors, said, ?We try to avoid price hikes by cutting costs but sometimes there is no option.? Telang observed that demand for CVs was fairly strong and that the management was cautiously optimistic about the near future. On the company?s assembly line in South Africa, the MD observed that it would be up and running early next quarter. However, Tata Motors is yet to zero in on a partner for its China joint venture.
The company plans to spend Rs 2,500 crore to Rs 3,500 crore a year on capital expenditure for the India operations and ? 1 billion annually for JLR. During the December quarter, the company?s market share in the domestic CV market increased to 64.1%.Tata Motors? market share in the passenger vehicles space stood at 12.7% for the nine months to December 2010. Tata Motors? consolidated net debt to equity was 0.8:1 at the end of December 2010 with the net debt at Rs 15,000 crore.
The company?s shares closed the day at Rs 1,144.65 on the Bombay Stock Exchange, up 3.79 per cent from the previous close.