The Indian passenger car market continued its fast paced growth in the quarter ended December 2004 and this was reflected in the financial results reported recently by automakers Maruti Udyog a couple of weeks ago, Tata Motors and Mahindra & Mahindra and some component suppliers.
Go deeper with GlobalData
In latest results just out, Tata reported a 50% increase in after-tax profit to INR3.16 billion (€56.4 million) for the third quarter, up from INR2.10 billion (€37.5 million) in the previous year. However the carmaker warned that the fourth quarter may see a squeeze in margins thanks to rising raw material costs and cost of shifting to the Euro III emissions compliance now mandatory for new vehicles sold in major Indian cities.
Mahindra & Mahindra reported a 52.34% rise in profit after tax to INR1.33 billion (€23.75 million), up from 2003’s INR874.2 million (€15.6 million). The increase was due mainly to an 18% increase in utility vehicle sales and a 28% rise in tractor volume.
Hindustan Motors seems to have turned a corner. It also enjoyed a good quarter, reporting its second consecutive period back in the black – the INR18 million profit contrasted with Q3 2003’s INR300 million loss.
The healthy turnaround was due to strong sales of Hindustan’s old warhorse – the 1950s Morris Oxford-based Ambassador with its modern Isuzu diesel engine option – and new products from the company’s Pitampur transmission plant which also makes gearboxes for other Indian automakers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe company also reduced its interest burden substantially by restructuring debt.
Some Indian auto industry suppliers continued to do well in the third quarter though others recorded a fall in profits due to increased material costs.
Goetze India reported third quarter net profit growth of 69.5% to INR56.8 million (€1.01 million), Rane Madras reported a 4.27% drop to INR17.9 million (though turnover increased 32% to INR637.8 million) and Cummins India reported a 22% increase to INR328.5 million, up from INR269.4 million a year ago.
Tube Investments of India made INR264.8 million net profit, up 43% year on year, Motherson Sumi Systems reported INR134.1 million, up from INR115.6 million, and Sundram Fasteners reported INR247.5 million (INR 120.3 million).
However, Sundram’s result for Q3 2004 includes TVS Autolec’s sales, which was merged with Sundram Fasteners during the fiscal year. Sister company India Motor Parts and Accessories Ltd (IMPAL) reported net profit of INR 23.3 million for the quarter, a marginal increase over the INR 22.3 million made a year ago.
Another group company, Sundaram-Clayton, recorded net profit of INR138.9 million, a fall of 7.33% on Q3 2003’s INR149.9 million. Net sales grew 25.5% to INR1.36 billion though rising raw material hit profit.
Deepesh Rathore / Tilak Swarup
