Tata Motors Q1 net profit zooms 58% on one time gain
July 27, 2009
Tata Motors Ltd, India's largest vehicle maker Monday reported a 58% growth its first quarter net profit mainly on the revenues earned by selling its stake in Tata Steel Ltd to its parent company—Tata Sons Ltd.
For the quarter to end-June, Tata group’s standalone net profit jumped to Rs5.1 billion from Rs3.3 billion, while its total revenues including sales declined 7.6% to Rs64.0 billion from Rs69.3 billion.
Last month, Tata Motors sold its 1.5% stake in its sister concern Tata Steel Ltd to Tata Sons Ltd for about Rs4.6 billion. During the quarter, Tata Motors’s persistent focus on cost efficiencies, coupled with reduction of raw material prices, inventory reduction and improvement in sales realisation, yielded considerable benefits, resulting in the operating margin to 11.4% from 7.1% in the previous year. Its operating profits rose 48% to Rs7.3 billion from the same period last year.
Its domestic sales during the April to June quarter declined 1.4% to 122,120 units, while exports tumbled 43% to 5,220 units, thanks to the global economic conundrum, according a release.
Improvement in liquidity, increased reach across the country and introduction of new products and variants improved the company's sales, except in the case of the heavy truck segment, it said.
Tata Motors said the heavy truck segment is showing signs of recovery, albeit gradually, in response to infrastructure development, government stimulus packages for the automobile industry and Jawaharlal Nehru National Urban Renewal Mission (JNNURM) initiatives.
Tata Motors has received a majority of the orders for buses from different state governments under JNNURM. Meanwhile, the company’s shares closed 0.4% up at Rs375 on the Bombay Stock Exchange, while the benchmark Sensex ended flat at 15,375 points. - Yogesh Sapkale[email protected]