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May 29, 2013, 07.46 PM IST | Source: Moneycontrol.com

Tata Motors beats street in Q4; domestic challenges remain

While its British luxury Jaguar Land Rover unit continued to see strong growth, domestic operations remained a drag posting a loss of Rs 312 crore in Jan-March, compared with a profit of Rs 565 crore in the year ago quarter.

Nachiket Kelkar
moneycontrol.com

Tata Motors on Wednesday reported a lower-than-expected 37 percent decline in fourth quarter consolidated net profit at Rs 3,945 crore.

While its British luxury Jaguar Land Rover unit continued to see strong growth, domestic operations remained a drag posting a loss of Rs 312 crore in Jan-March, compared with a profit of Rs 565 crore in the year ago quarter.

Standalone revenue declined 32 percent to Rs 11,068 crore.

On a consolidated basis, Tata Motors' revenue was at Rs 56,002 crore in Jan-March up 10 percent.

It must be noted that JLR's net profit in the year ago quarter was boosted by a credit of GBP 225 million (Rs 1,794 crore) for past income tax losses.

Analysts on average had expected the company to report a consolidated net profit of Rs 2,990 crore, on revenue of Rs 53,000 crore according to a CNBC-TV18 poll.

Tata Motors' consolidated EBITDA (earnings before interest, taxes depreciation and amortization) margin expanded to 14.9 percent from 14.1 percent. Standalone margin came in at 3.6 percent, compared with 9.5 percent a year ago.

JLR's revenue in Q4 gained 22 percent to 5.05 billion and profit after tax was at GBP 378 million.

JLR's wholesales in Jan- March were up 19 percent to 1.16 lakh units, driven by strong demand for the Evoque and new launches like the new Range Rover.

Also Read: Maruti, M&M good bets, neutral on Tata Motors: Nomura

Demand is particularly strong in China, which Dr Ralph Speth, CEO, JLR, expects will overtake Europe as its biggest region by sales this year.

However, the domestic slowdown shows no signs of ending any time soon. The total sales of commercial and passenger vehicles plunged 31 percent to 1.97 lakh units, last quarter.

While it has managed to maintain its CV market share at around 60 percent, it is losing out in the PV space, where the overall industry demand as such is slow.

"What we have seen last year is that PV market has remained flat. However, we have seen huge increase in SUVs versus cars. How do we see the PV business going ahead? There is no immediate expectation for any great change," Karl Slym, MD, said.

Medium and heavy truck market also is unlikely to pickup untill the overall economic growth picks up and fleet operators' existing capacity gets filled, he added.

Tata Motors will launch 40-50 products in cV space, including the Ultra LCV range this financial year, to maintain its lead in the space. In cars there will be product refreshes and Nano varints to stem the decline. New cars will roll out in the long term.

JLR will launch several products including the Range Rover Sport and Jaguar F Type. It is also developing a new diesel-hybrid SUV.

For FY14, JLR has earmarked a capex of GBP 2.75 billion, up from GBP 2 billion, last year. Tata Motors will spend around Rs 3,000 crore, similar to last year.

Its standalone debt stood at Rs 15,000 crore. Consolidated automotive debt was at Rs 9,000 crore. JLR had GBP 2.85 billion in liquid funds.

READ MORE ON  Tata Motors, JLR
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