JLR drives Tata Motors Q2 net up by 71% to Rs 3,542 crore
Mumbai: Home-grown auto major Tata Motors on Friday reported a healthy 70.7 percent rise in net profit at Rs 3,542 crore in the three months to September, driven by yet again a robust show by its British unit Jaguar Land Rover (JLR).
However, the Tata Group firm reported losses from its Indian operations due to sluggish economic environment, which impacted the demand for commercial and passenger vehicles. The company has been one of the worst performers on the sales front in the country for quite some time now.
Net sales on a consolidated basis rose to Rs 55,701.22 crore in the the second quarter ended September 30, an increase of 30 percent over the same period a year ago.
"The company has reported a sound rise in revenue despite weak operating environment in the domestic business which was more than offset by increase in wholesale volumes and richer product and market mix at JLR," Tata Motors Chief Financial Officer C Ramakrishnan told reporters here.
On a standalone basis, Tata Motors posted a loss of Rs 803.53 crore as against a net profit of Rs 867.11 crore in the same period of previous financial year. Net sales also declined to Rs 8,761.10 crore as against Rs 12,396.46 crore during the same period of last fiscal.
"Continued slowdown in economic activity, low level of transport freight and infrastructure activity, frequent diesel price increases and tight financing environment have impacted the industry during the quarter," said Tata Motors Managing Director Karl Slym.
However, he added the domestic operations would do better as the economy improves and the company launches new products going ahead.
Speaking about Nano, Head of Passenger Vehicle Division, Ranjit Yadav said the company has repositioned the small car as a smart urban vehicle and the new model is gaining traction among consumers.
Meanwhile, the company, on consolidated basis, reported a stellar performance, thanks to luxury brand JLR, which the Indian auto major bought in 2008.
JLR sales rose by a healthy 31.6 percent to 1,01,931 units in the reporting quarter, riding on demand for the Range Rover Sport, new Range Rover and Jaguar F-type models.
JLR Chief Executive Ralf Speth said the company is witnessing robust demand for its products and has strong order book.
"We continue to generate strong operating cash flows to support investment in the region of 2.75 billion pounds in FY14," Ramakrishnan said.
The company, which has embarked on various efficiency improvement measures, said it is planning to restructure its overseas companies into a single holding entity.
Ramakrishnan said Tata Motors has lined up repayment of about Rs 1,000 crore towards the fiscal-end, which will be done through fresh refinancing.
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