Tata Motors Disappoints With December Quarter Results

The Indian Auto manufacturer, Tata Motors posted a consolidated revenue of Rs 69973 crore for December 2014 quarter, a growth of 9.6 per cent over December 2013 revenue. Jaguar Land Rover (JLR) continued to help Tata Motors to post better revenue growth despite continuing weak operating environment in the standalone business which was more than offset by, increase in wholesale volumes, richer product mix and market mix at JLR.

However, the company’s consolidate net profit (before minority interest and profit / loss in respect of associate companies) showed a de-growth of 6.4 per cent to Rs 5732 crore during December 2014 quarter. The consolidated net profit (post minority interest and profit / loss in respect of associate companies) for the quarter was Rs 3581 crores, a de-growth of 25.5 per cent over Rs 4805 crores for the corresponding quarter last year. The stock price was down by more than 5 per cent after announcement of the quarter result.

On domestic front, the Tata Motors posted a yearly volume growth of 42.9 per cent in its medium and heavy commercial vehicle segment during December 2014 quarter due to positive economic sentiment, firm freight rates and improved freight availability, lower fuel prices and improved profitability of truck operators led to replacement demand. However, the light commercial vehicle segments continued to be impacted by low transportation tonnage and vehicle over-capacity as well as constrained financing environment. As consequences, the overall commercial vehicle sales were down by 8.5 per cent on yearly basis during December 2014 quarter.

The company launched its new passenger vehicle, Zest which received a very strong and encouraging response from the customers. Hence the passenger vehicle segment showed a yearly growth of 4.6 per cent with car segment growth of 16.8 per cent during December 2014 quarter.

Overall the company’s standalone sales (including exports) for December 2014 quarter stood at 127484 units, down by 3.5 per cent, as compared to the corresponding quarter last year. The revenues for the same quarter stood at Rs 9056 crores, as compared to Rs 7770 crores for the corresponding quarter last year. However, the company posted a loss of Rs 2123 crores during December 2014 against the net profit of Rs 621 crore in December 2013 quarter.