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Tata Motors Q3 profit down 26 pct, misses estimates
February 5, 2015 / 2:47 PM / 3 years ago

Tata Motors Q3 profit down 26 pct, misses estimates

MUMBAI (Reuters) - Tata Motors Ltd (TAMO.NS), India’s biggest automaker by revenue, posted a fall in quarterly profit, missing analyst estimates, due to losses in its domestic business, unfavourable foreign exchange rates and a dip in sales at its Jaguar Land Rover unit.

Tata Motors logos are seen at their flagship showroom before the announcement of their Q3 results in Mumbai February 14, 2013. REUTERS/Vivek Prakash/Files

Tata Motors, part of the $100 billion Tata conglomerate, said on Thursday consolidated net profit in the quarter ended Dec. 31 fell 25.5 percent to 35.81 billion rupees ($580 million) compared with 48.05 billion rupees a year ago.

Analysts had expected, on average, profit of 49.24 billion rupees, according to Thomson Reuters I/B/E/S.

Consolidated sales rose 8.6 percent to 699.42 billion rupees.

Bought by Tata in 2008, British carmaker Jaguar Land Rover (JLR) has been propping up profits at its parent for the past few years helped by strong sales growth in China, the world’s biggest auto market.

But cooling economic growth in China hurt JLR’s sales, which grew only 4 percent in the quarter in the Asian nation compared with 40 growth between April and September.

“We are still cautiously optimistic about China,” Ralf Speth, JLR’s chief executive officer, told reporters. “We are opening new dealerships ... and are also optimistic about volume growth in China,” he said.

JLR, which opened a manufacturing facility in China in October, expects to begin retail sales of its locally-produced Range Rover Evoque SUV in the quarter ending March 31.

Tata Motors expects capital spending of up to 3.8 billion pounds on JLR in the fiscal year starting on April 1, its chief financial officer C Ramakrishnan said.

JLR’s EBITDA margins fell to 18.6 percent during the quarter compared with 19.1 percent in the year ago quarter and profit after tax at the luxury unit fell an annual 4 percent to 593 million pounds ($907 million) in part due to “unfavourable revaluation of foreign currency debt”, Tata said.

Global retail sales of JLR’s sleek Jaguar saloons and Range Rover SUVs fell 0.6 percent year-on-year in October-December, mainly due to a fall in sales in North America.

Tata reported a net loss of 21.23 billion rupees at its standalone business compared with a net profit of 12.51 billion rupees in the year ago quarter, due to higher expenses and a fall in sales as it struggled to banish an image that its cars are not cool because they are used as taxis.

Sales of its passenger cars and trucks and buses fell an annual 3.5 percent to 127,484 units during the quarter, also hit by a slow recovery in India’s economy.

In August, Tata launched its first new car in India for four years, a compact sedan called Zest, followed by the Bolt hatchback in January -- part of its plan to launch two new vehicles every year until 2020 to revive domestic sales.

($1 = 61.7514 rupees)

($1 = 0.6538 pounds)

Writing by Aditi Shah; Editing by Sumeet Chatterjee and Mark Potter

Our Standards:The Thomson Reuters Trust Principles.
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