INDIA: Tata Motors boosts profits
Tata Motors improved its first quarter operating margin to 11.4% from 7.1% a year ago, booking operating profits of INR7.3bn (US$152.7m), up 47.9%.
Revenue declined 7.6% to INR64bn for the fiscal quarter ended 30 June.
"The company's continued focus on cost efficiencies, coupled with reduction of raw material prices, inventory reduction and improvement in sales realisation, yielded considerable benefits," it said in a statement.
Pretax profit grew 58.8% to INR5.48bn and after tax profit was up 57.5% to INR5.13bn.
Tata noted its net interest cost rose 126% to INR2.53bn for the quarter due to increased debt taken by the company during the previous year to support its product programmes (new Nano including the abandonment of an almost complete plant), investments (including the purchase of Jaguar Land Rover) and working capital requirements.
Depreciation rose 27% to INR2.29bn "reflecting the increased investments in new products and supporting capabilities".
The company also booked an exceptional foreign exchange valuation loss of INR55.4m.
Tata said sales improved, except in the heavy truck segment though that was recovering, albeit slowly, in response to infrastructure development, government stimulus packages for the automobile industry and urban renewal projects.
Domestic unit sales rose 1.4% to 122,120 but exports were off 43% to just 5,220. Total sales slipped 4.3% to 127,340 vehicles.
During the quarter the company completed allotment of Nanos, following the car's launch last March 2009 and has begun deliveries. It also opened its first Jaguar Land Rover showroom in India at Mumbai and added the Grande Punto to its Fiat line.
A spokesman said the results were for Tata Motors only and did not include Jaguar Land Rover which is booked as a separate unit. He added that they showed clearly the Indian market was "picking up".
Slumping Land Rover sales dragged Tata to a full year loss for fiscal 2008/9.