record profit from Tata..
While other manufacturers are reporting record loss, Tata Motors reported a 22 percent rise in quarterly standalone net profit, increased by 22% to Rs.466.76 crores, compared to Rs.381.85 crores in the corresponding quarter last year.Tata Motors standalone revenues (net of excise) was Rs.6056.82 crores, an increase of 5% compared to Rs.5749.56 crores in the corresponding quarter last year. Tata Motors profit grew faster than sales, because of a foreign exchange gain of about Rs 2 billion. Tata has able to offset high input costs and high interest rate through foreign exchange gains, cost-cutting and strong sales of light trucks and passenger vehicles. However tata motors operating margins fell to 9.0 percent from 11.5 a year ago, excluding a foreign exchange gain in the quarter.
Tata Motors sold 127,361 units during the quarter, a 1.4 percent rise from a year earlier. On domestic front sales of commercial vehicles decreased by 2% to 61,633 units, while domestic sales of passenger vehicles at 52,573 units grew by 5%.
Also while other manufacturers suffered because of strengthening of rupee against US dollar Tata motors benefitted from it, the company gained from the weakening of the US dollar against currencies in markets that buy Tata products. Tata sells cars, buses, trucks and utility vehicles in Africa, the Middle East, and in Asia and Australia. Tata Motors exported 13,889 vehicles during the first quarter, a growth of 6% over 13,161 units in the corresponding quarter last year.
Street expectation:
Tata Motors result beat a Reuters poll forecast for a net profit of 357 crore rupees on sales of 5964 crores.As a result of this incredible result, Tata Motors full-year net profit is forecast to rise 10 percent to Rs2061 crores according to Reuters Estimates.
Tata’s word on high interest rate:
Till the time that interest rates soften substantially, sentiment for commercial vehicles won’t improve,” Kant said. Meanwhile Reserve Bank of India(RBI) held official rates steady at a policy review on Tuesday but raised reserve requirements for banks(CRR – Cash Reserve Ratio by 50bps), which will reduce funds available for lending.
Share movement:
Tata motors shares fell 8 per cent in the June quarter, trailing a 2.7 percent fall for the sector index and a 12 per cent gain for the main index. Tata Motors shares, valued at more than $7 billion, trade at 14.2 times forecast earnings, compared to 19.5 times for Mahindra.Shares of the company lost Rs 7.90, or 1.12%, to settle at Rs 699.30, at the BSE. The total volume of shares traded was 1,367,036.
Happenings in June quarter(Q1):
During the quarter, Tata Motors launched several new vehicles. In passenger vehicles, the company has introduced the Indigo LS, an entry level common rail diesel (DICOR) offering in the sedan range, expanded the long wheel base Indigo XL’s range with the Indigo XL Classic, and launched an upgraded range of Tata Spacio, its entry level utility vehicle. Tata Motors also introduced a new range of commercial vehicles for passenger transportation, the Magic and the Winger, which are expected to create new segments. The mini-truck, Ace, has been introduced in Nepal. Tata Motors has also received an order from the Delhi Transport Corporation to supply 500 state-of-the-art low-floor CNG-propelled buses, which will begin to be delivered from the second half of the financial year. In May Tata Motors recommended a dividend of 150%, or Rs 15 a share, on 385,381,536 ordinary shares.
Tata’s investment plans and products:
Tata Motors will roll out a 2.2L Safari SUV and a refurbished Sumo this quarter.
Tata Motors has drawn up a capital spending programme of Rs 12,000 crore over the next three years. To part-finance the expansion, it has already raised $490 million through foreign currency convertible bonds (FCCBs). The new models to be launched by the company will be inclusive of; the one lakh car, the new generation Indica and Indigo, cross-over models that the company had launched at the Geneva Auto show, new pick-up trucks to be developed in Thailand and a new range of trucks. Tata has decided to invest USD 38 million to launch its first production base in Thailand(world’s largest light pick-up market). Tata Motors is also planning to erect an assembly plant for its vehicles in South Africa. Currently Tata Motors is bidding to buy luxury British car brands Jaguar and Land Rover from US car maker Ford.