Tata Motors fails to cheer

Mumbai, Nov. 7: Tata Motors today disappointed as net profits for the second quarter ended September 30 missed estimates because of challenging conditions in the domestic market. The automobile giant posted a consolidated net profit of Rs 2,075 crore, a growth of 10.5 per cent over Rs 1,877 crore in the same period last year.

Analysts had expected the company to post net profits in the region of Rs 2,200-2,400 crore.

Though Jaguar Land Rover (JLR) continued to post a robust performance, it was not adequate to shrug off the impact of the economic slowdown in India. According to Tata Motors, weak macro-economic outlook and sluggish industrial demand coupled with diesel price increases impacted sales of medium and heavy commercial vehicles (MandHCVs).

Competitive pressures on pricing in certain segments and a weak product mix also hurt operating margins in the domestic market. Operating margins on a standalone basis stood at 5.9 per cent compared with 7.2 per cent in the year-ago period.

Net sales for the quarter jumped to Rs 42,818.90 crore from Rs 35,938.47 crore in the same period last year.

A sharp jump in other operating income to Rs 583.98 crore (Rs 259.07 crore) boosted total income to Rs 43,402.88 crore from Rs 36,197.54 crore last year.

Commercial vehicle sales stood at 136,353 units, a growth of 4.8 per cent over last year, driven largely by the LCV segment. This came even as MandHCV sales dropped 15.3 per cent to 42,948 units.

On the other hand, passenger vehicle sales stood at 72,603 units, an increase of 11.6 per cent over last year.

However, its subsidiary Jaguar Land Rover continued to post a good performance with wholesale volumes rising over 9 per cent to 77,442 units. Retail volumes jumped 19 per cent to over 85,000 units. Jaguar sold 9,832 units during the period and Land Rover sold 67,610 units.

Growth in volumes was driven by the continued strong demand from China, which represented 21 per cent of sales for the quarter against 16.3 per cent for the corresponding period last year and by sales of the Range Rover Evoque.

JLR posted revenues of �3.28 billion, representing a growth of 12.8 per cent over �2.91 billion last year.

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