Tata Motors posts flat fourth-quarter net profit
30 May 2014
India's biggest carmaker by revenue, Tata Motors, posted flat fourth-quarter net profit on Thursday, amid losses and sales drop in its sluggish home market, which was made up by luxury Jaguar and Land Rover vehicles.
But this month's election victory of the BJP has considerably brightened the outlook for the auto industry and raised hopes that stalled economic reforms would be back on track to help growth in Asia's third-largest economy.
The company remains bullish as looks to increase sales of its trucks and buses in India, where it leads the pack.
"We believe the economic sentiment will improve ... in the first half, leading to more positive and direct impact on our industry and our sales in the second half of this year," C Ramakrishnan, Tata Motor's president and chief financial officer, told reporters.
The company Jaguar Land Rover Ltd (JLR) had helped offset weak domestic sales where high car ownership costs and sluggish economic growth had deterred buyers of cars and commercial vehicles.
However, this fiscal year is likely to see car sales increase marginally after two consecutive years of declines, as economic expansion gets a boost with tax cuts under a new government, according an industry body.
The automaker reported a marginal drop in consolidated net profit at Rs3,918 crore in the fourth quarter ended 31 March from Rs3,945 crore a year ago as the key sector remained plagued by weak consumer sentiment and a high interest rate regime.
Consolidated revenue was up 16.6 per cent to Rs65,317 crore from Rs56,002 crore in the same quarter last year, according to the company.
The full year, FY'14 profit of the auto major increased 41.4 per cent to Rs13,991 crore from Rs9,893 crore in FY13.
Consolidated revenue for FY14 was up at Rs 2,32,834 crore, an increase of 23.3 per cent from Rs 1,88,793 crore last fiscal.
The net loss of the company, on a standalone basis widened to Rs817 crore in the fourth quarter from Rs312 crore in the same period last year.
The slowdown in economic growth led to weak consumer sentiments, high inflation, higher fuel prices, reduced availability of finance and an elevated interest rate regime continued to impact the demand for the entire auto industry in general and commercial vehicles specifically, Ramakrishnan said.
Standalone revenue was down to Rs8,545 crore in the quarter as against Rs11,068 crore a year ago.