Sharp fall in the value of British pound following the Brexit vote has prevented Tata Motors from posting a strong performance despite higher volumes across most of its businesses.
The company for the first quarter of the 2016-17 fiscal posted a consolidated profit of Rs 2,260 crore, which is 57 percent lower than what it managed in the same period last year (Rs 5,254 crore).
Revenues, however, grew by 10 percent to Rs 66,101 crore (Rs 60,094 crore) on the back of strong volumes, both at Jaguar Land Rover (JLR) operations and in India. The impact of the foreign exchange fluctuation was severe – Rs 2,296 crore.
Standalone, JLR business saw a revenue of Rs 5,461 pounds in the first quarter compared to 5002 million pounds in the corresponding period of the previous fiscal thanks to better volumes. But the 207 million pound forex charge pulled the profits down by 38 percent to 304 million pound as against 492 million pound that the luxury car maker posted in the Q1 of the previous year.
The Indian operations, at revenue level, did well too. Sales rose to Rs 11,311 crore (Rs 10,263 crore) on the back of higher demand for its commercial vehicles. The overall increase in volume was 8 percent. But due to higher depreciation and other charges, the profits fell sharply by over 90 percent to Rs 26 crore from Rs 290 crore.
The Tata Motors stock price ended the day at Rs 514.25, 4 percent higher than its opening price on Friday.