Tata Motors profit takes a big leap

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Tata Motors the country's largest automobile company, streaked way ahead of Street estimates by posting a consolidated net profit of Rs 2,223 crore in the three months ended September 30 compared with a mere Rs 22 crore in the corresponding quarter of last year.

Consolidated net revenues grew 36.5 per cent to Rs 28,782 crore in the second quarter of this fiscal from Rs 21,088 crore in the three months ended September 30, 2009. The company witnessed a strong volume growth across both domestic and international markets. Jaguar Land Rover, the British luxury brands that the company has successfully turned around, fared well, especially in China. "The Jaguar Land Rover business continued to show strong profitability with healthy volumes in the second quarter and a profit after tax of Rs 1,715 crore," said a statement by Tata Motors. "Both wholesale and retail volumes improved favorably compared with the corresponding quarter in the prior year on the back of improved market conditions and a continued overwhelming response," it added.

On a standalone basis, Tata Motors' revenues in the second quarter grew 44 per cent to Rs 11,504 crore from Rs 7,978 crore in the corresponding period of the last year. However, anticipated cost pressures and supply chain bottlenecks triggered a 9.7 per cent dip in operating margins. Standalone profit after tax or this quarter was Rs 433 crore compared with Rs 729 crore last year. However, in the corresponding quarter of the ast year, the company had booked a profit of Rs 370 crore on sale of investments that were not subject to tax.

In India, favorable economic conditions, a good monsoon and easy availability of financing contributed to the high demand and subsequent y higher volumes. Commercial vehicle sales -where the company has a 61 per cent market share -grew 23.4 per cent year on year. Passenger vehicles, which include Fiat and luxury brands Jaguar and Land Rover, grew 35.5 per cent year on year. The Tata Motors scrip reached a new high ahead of the results and closed at Rs 1,270.55, an increase of 0.20 per cent on the Bombay Stock Exchange today. 

Source: http://www.telegraphindia.com

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