Mumbai: Tata Motors Ltd’s March quarter profit fell by half from a year ago as vehicle sales declined at its British unit Jaguar Land Rover (JLR) Automotive Plc and its Indian operation reported a loss.
Net profit, including those of its units, fell to Rs2,175.16 crore for the three months ended 31 March from Rs4,336.43 crore in the same period a year earlier. Sales rose 15.9% to Rs91,279.09 crore from Rs78,746.61 crore a year ago.
A Bloomberg poll of 16 analysts had estimated a quarterly profit at Rs3,748 crore on sales of Rs88,196 crore.
Profit was hit by a weak performance by JLR—which accounts for over 80% of Tata Motors’ profit—in addition to a loss at the domestic unit.
JLR posted a 3.8% year-on-year decline in sales to 172,709 units. Sales in Europe, including the UK, continued to decline, while sales growth in China slowed to 11%. The American market sprang a surprise with a 3.48% rise in sales to 36,325 units during the quarter.
JLR saw a “tough and challenging" year, with sales weighed down by factors such as Brexit, adverse taxation on diesel cars in the UK and Europe, and market cyclicality in the US and UK, Ralf Speth, chief executive at the luxury carmaker, said at a press conference after the results announcement. Going forward, JLR is “absolutely confident" and is “going in the right direction" on the back of a strong demand from India and China, and a strengthened product portfolio, with five new models and refreshes coming in last year, including the best-selling Range Rover Velar and Discovery. These will gain traction and volumes this fiscal, Speth added.
For the coming fiscal, JLR will spend close to £4.5 billion on the development of new vehicles and next-gen technologies, as it aims to have an electric variant for each model by 2020.
The UK-based unit posted an Ebitda margin of 12.2% during the fiscal, down 1.8 percentage points from a year ago. Ebitda—or earnings before interest, tax, depreciation and amortization—is a measure of operating profitability.
The unit’s revenue rose about 4% to £7.6 billion.
After a one-off profit in the December quarter, Tata Motors’ domestic business reported a loss in the March quarter. The business, however, narrowed its loss to Rs499.94 crore in the quarter from a loss of Rs805.93 crore in the year-ago quarter. The domestic operations reported a 45% jump in revenue to Rs19,779 crore.