Image: Amit Dave / Reuters
Poor performance of the commercial vehicle segment overshadowed a sharp increase in sale of cars to drag Tata Motors profit down by as much as 96 percent. The company posted a consolidated profit after tax of Rs 112 crore for the quarter ended December 2016 compared to Rs 2,953 crore in the corresponding period of the previous year. Its revenues during the period were Rs 67,484 crore (Rs 70,567 crore).
It was the company’s domestic operations that played the spoilt sport. Sharp demand shrinkage in the commercial vehicle segment post-demonetisation saw medium and heavy duty commercial vehicle volume volumes shrink by 9 percent. Light commercial vehicle volumes remained flat. Car sales, however, continued to grow. The company’s car segment grew by 31 percent year-on-year on the back of strong performance by Tiago. Exports rose by 35 percent as well. But the performance of the car business was not good enough to prevent Tata Motors’ India operation from posting a sharp increase in losses. Losses rose to Rs 1,046 crore from a loss of Rs 137 crore the company had posted in Q3 of 2015-16 fiscal.
Tata Motor’s Jaguar Land Rover (JLR) business posted a strong performance. The overall sales rose 8.5 percent. This pushed the September-December 2016 revenues up by 13 percent to 6,537 million sterling pounds up from 5,781 million pounds in the corresponding period of the previous year. The China operation generated a higher profit of 35 million pounds in the October-December 2016 quarter compared to 22 million pounds in the corresponding period of the previous year. But higher new model launch costs, biennial pay negotiation settlement, higher depreciation and amortization pulled down JLR’s profit. Profit after tax was lower at 167 million pounds as against 440 million pounds in the October-December quarter of 2015.
For the nine month period ended December 31, 2016, the company posted a consolidated revenue of Rs 1,99,429 crore (Rs 1,92,543 crore). The consolidated profit for the period was Rs 3,220 crore (Rs 6,467 crore).