Hit by the overall slowdown, Tata Motors’ net profit for the first quarter ended June 30 declined 23 per cent.
The fall was despite higher sales by British subsidiary — luxury carmaker Jaguar Land Rover.
The country’s largest commercial vehicles manufacturer posted a consolidated net profit of Rs 1,726 crore for the quarter under review compared with Rs 2,245 crore in the same quarter a year ago. Consolidated revenues grew 8 per cent to Rs 46,785 crore (Rs 43,324 crore).
“A weak macroeconomic environment and competitive pressures on pricing, continued to impact operations during the quarter,” said Chief Financial Officer C. Ramakrishnan. “Margins will continue to be under pressure for the industry in general.”
Prolonged slowdown
“We are in the middle of a slowdown. We have seen slowdowns before also, but the difference this time is that it’s more prolonged,” said Tata Motors Executive Director (Commercial Vehicles Business Unit) Ravindra Pisharody.
According to Puneet Gupta, Principal Analyst (India Automotive) at analyst firm IHS: “Tata Motors is one of the companies, which is pulling down the Indian auto industry, especially in the passenger car segment. I don’t think they are doing enough for the near future. Maybe the company is shadowed by JLR, which is doing better and it is focused towards JLR right now.”
Standalone profit up
On a standalone basis, the company’s net profit more than tripled to Rs 703 crore (Rs 205 crore in the first quarter of the previous fiscal), aided by a dividend of Rs 1,537 crore from JLR and other subsidiaries.
JLR RISES
JLR posted strong first quarter revenues of £4,097 million, up 13 per cent from £3,638 million reported during the same period a year ago.
Its retail sales rose 10 per cent year-on-year to 94,719 vehicles, reflecting a strong demand for all its products.
JLR hopes to sell 1 lakh cars in China this year, its Chief Executive Officer Ralf Speth said. “We are on track.”
On Wednesday, Tata Motors’ shares closed down 2.96 per cent at Rs 278.85 on the BSE.