Tata Motors has reported consolidated profit of ₹1,214 crore for the quarter ended December 31 compared to a profit of ₹111 crore in the corresponding quarter last year.
Though this represents a 11-fold increase in year-on-year profits, the company saw its bottomline plunged sequentially by nearly 50 per cent compared to a profit of ₹2,501 crore in the September quarter.
Brexit uncertainty in the UK and slower US market hit JLR operations.
Commenting on JLR’s performance, Tata Motors said that, “Profitability was impacted by the run-out of the 17 Model Year Range Rover and Range Rover Sport (18 Model Year with PHEV option now launching) and higher depreciation and amortization resulting from continued investment to drive profitable growth.
“Total investment in new products, technology and capacity was over £1 billion in Q3 and is expected to exceed £4 billion for the full year.”
Consolidated revenue from operations grew to ₹74,337 crore against ₹65,110 crore in the December quarter in 2016.
Global uncertainties
For JLR, China and overseas markets were up, while the UK, the US and European markets were lower reflecting more challenging conditions with cyclical weakness in the UK and the US, increasing diesel uncertainty in the UK and Europe, and Brexit uncertainty in the UK.
Ralf Speth, Jaguar Land Rover CEO, said: “Despite headwinds and uncertainty in some markets, Jaguar Land Rover still delivered increased unit sales as we continued the launch schedule for new models including the significantly enhanced Range Rover family and all-new Jaguar E-PACE....we expect a stronger all-around performance in the Fourth Quarter driven by new models, seasonality, and improved profitability.”
Turnaround strategy
The turnaround strategy for India market seems to be working as the company reported profits of ₹183 crore on a standalone basis compared to a loss of ₹1,045 crore in the corresponding period last year. In the third quarter, overall wholesales (including exports) grew 31 per cent to 172,952 units with broad-based growth across the entire portfolio in the domestic market.
Guenter Butschek, Tata Motors, CEO & MD, said: “The turnaround strategy is delivering results for us as is evident in share gain in an intensely competitive market and improved profitability enabled by a slew of new product launches and customer centric initiatives.
“The regulatory landscape on emission norms including BS VI, EVs and alternative fuel sources are significant challenges for the industry and Tata Motors is ready to play its part, while we continue on our journey to drive competitive, profitable growth”.
Commenting on the domestic market N Chandrasekaran, Chairman, Tata Motors, said: “Our focus on market share gain coupled with operational improvements is working well, with both commercial and passenger vehicles businesses delivering improved results.
“We will continue on this journey to drive growth ahead of the market, reduce our cost base and invest prudently to deliver better products and service for our customers and improved returns for our shareholders.”