Financial status of Tata Motor for the first quarter of fiscal 2012-2013

Thursday 16 August 2012, 10:02 AM by

Tata Motors, the largest auto company of South Asia, announced a 30.1 per cent unified growth with revenues (net of excise) of Rs.43,324 crore in the first quarter of fiscal 2013 over the same period of last fiscal. Last year, the company registered the same revenues worth Rs.33,289 crore. The accretion is backed by the healthy advancement in volumes of new products and an affirmative market share of its subsidiary company, Jaguar Land Rover (JLR).

The unified profit of the company before Exceptional item and Tax stood at Rs. 3,623 crore, reporting a surge of 50.8 per cent against Rs. 2,403 crore in the same quarter of last year. The consolidated Profit Before Tax (PBT) was reported at Rs. 3,183 crore after Q1 of FY 2013 in a sharp surge from Rs.2,346 crore after the same period last year. Taking in consideration the after tax, post minority interest and profit on account of ally companies, the net consolidated profit/loss after the first quarter of FY 2013 stood at Rs. 2,245 crore, overtaking last year's Rs.2,000 crore in the year-ago period.

Exceptional items of Rs. 441 crore, which last year accounted for a loss of Rs. 57 crore, affected the unified profit of the auto major in the Q1 of fiscal 2013. The reasons were identified as net exchange loss, including fluctuations in the value of foreign currency, deposits and loans emerging due to the depreciation in the value of Indian Rupee (INR).

The standalone revenues (net of excise) of Tata Motors, for the quarter ended June 30, 2012, stood at Rs. 10,586 crore under the review of last year's Rs. 11,624. Uncertain macroeconomic framework, surge in excise duty and depleted resource availability led to pressure on the volumes in Medium and Heavy Commercial Vehicle (MHCV) segment.

The ever expanding competition in market impacted on the pricing of commercial and passenger vehicles, which affected the auto maker’s volumes and operating margins. In the first quarter of FY 2013, the operating margins of the company were 7.3 per cent with Rs.774 crore, which marked a dip of 1.5 per cent under the review of last year’s figures of Rs.1,020 crore.

The PBT after the first quarter of current fiscal was reported as Rs. 237 crore, a sharp decline from last year's Rs. 466 crore. Accordingly, the PAT for the quarter stood at Rs. 205 crore compared to year-ago period’s Rs. 401 crore. The loss incurred by the auto major in net exchange this year adversely affected both PBT and PAT. These exchange losses were mainly driven by fluctuations in the value of foreign currency, deposits and loans arising due to the depreciation in INR. The net exchange loss during the period stood at Rs. 161 crore, which marked a gain of Rs. 2 crore when compared with the figures of same period last year.

On the other hand, sales in commercial and passenger vehicle in the quarter finished on June 30, 2012 were reported at 190,483 units with a drop of 3.6 per cent from last year's figures. On the home ground, the Commercial Vehicle (CV) sales figures of Tata Motor stood at 114,710 units (1.3 per cent growth). The growth was driven by the demand of small CVs, which was facilitated by the decent production contributed by Tata Motors facilities at Pantnagar and Dharwad. In the quarter ended June 30, 2012, the total market share of Tata Motor in CV segment stood at 56.2 per cent.

In the domestic market, during the period, the company’s passenger vehicle sales were reported at 62,619 units, which marked a slump of 9.9 per cent from last year. The auto maker still continues to focus on marketing manoeuvres and expanding its dealership network actions along with emphasis on the sales and service process. In the first quarter of fiscal 2013, Tata Motors enjoyed a 9.8 per cent market share in passenger vehicles segment.

Considering the sales of Tata Motor’s luxury brand, Jaguar Land Rover, the volumes of company during the period surged to 83,452 units with a growth of 34.4 per cent. Jaguar sales accounted for 11,774 units during the period while the Land Rover sales stood at 71,678 units. Growth in volumes was largely fuelled by the sales of new Range Rover Evoque and a healthy demand and interest shown by the Chinese auto market, which expanded 91 per cent year-on-year basis. Sales from the China region accounted for 22.2 per cent of the total volumes for the quarter ended June 30, 2012, about 7 per cent boost from the figures of last year.

The revenues of the JLR after Q1 of fiscal 2013 were projected at £3,638 million with a growth of 34.6 per cent over £2,703 million last year. Accordingly, the operating margins during the period were reported at 14.5 per cent and an Operating Profit (EBITDA) of £527 million was recorded in the quarter, an increase of about 45.6 per cent over £362 million of last year. Persistent strong revenue and operating profit feats were aided by the demand of auto maker’s new products, favourable market conditions and balanced exchange rate situation. The PBT during the period was reported at £333 million (£251 million last year) and the PAT for the quarter stood at £236 million (£220 million last year). Following with a strong financial statement, JLR announced dividends in excess of £150 million (equivalent to Rs 1,290 crore) in August 2012.

Bringing the revenues of Tata Motor’s another subsidiary in limelight, Tata Daewoo Commercial Vehicles Company Limited reported net revenues of KRW (South Korean Won) 217 billion. In the quarter ended June 30, 2012, the new profits of the company stood at KRW 3 billion. Considering the net revenues from operations of Tata Motors captive financing arm, Tata Motor Finance Limited, the company registered an amount of Rs. 623 crore and registered a Profit After Tax worth Rs. 73 crore, during the period.

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