Tata Motors Q4 net halves on U.K. headwinds

Tata Motors Ltd. has reported a 50% decline in consolidated net profit for the fourth quarter ended March 31, 2018, at ₹2,175 crore from ₹4,336.43 crore in the same period last year. This, owing to a challenging business environment in the U.K., the home market of the company’s cash cow subsidiary Jaguar Land Rover (JLR).

A one time provisioning of ₹1,641 crore towards impairment of certain products on development and capital work in progress had also dragged down net profit.

Revenue rises

Consolidated revenue for the quarter increased to ₹91,279 crore from ₹78,747 crore in the same period last year, an increase of 18%.

For the financial year ended March 31, 2018, the company reported a consolidated net profit of ₹9,091.36 crore compared with ₹7,555.66 crore in the previous year.

On a consolidated basis, revenue grew to ₹2,95,409 crore compared with ₹2,74,492 crore in the previous year. On a standalone basis, Tata Motors (domestic business) reported lower net loss of ₹583 crore compared with a loss of ₹729 crore in the same period last year. Revenue increased to ₹19,779 crore from ₹15,080 crore in the same period last year.

For FY 2017-18, the domestic business reported a net loss of ₹992 crore compared with a net loss of ₹2,335 crore in the previous year.

Income increased to ₹59,625 crore from ₹49,054 crore in the previous year.

“JLR delivered profitable growth despite challenging market conditions. In the near term, the challenges of market, technology and geo political uncertainties are likely to persist. We will focus on cost efficiencies, drive operating leverage and manage capital spends prudently,” Natarajan Chandrasekaran, Chairman, Tata Motors, said in a statement.

For the year 2017-18, JLR reported a net revenue of £25,786 million, 6% more than that of the previous year. Profit before tax was down 5% to £1,536 million. JLR reported a net profit of £1.1 billion. “Despite external headwinds, these results reflect the underlying strengths of JLR. Sales have reached a new high, as strong demand in our key overseas markets (China and the U.S.) offset the challenging conditions in U.K. and other parts of Europe,” said Ralf Speth, CEO, JLR.

Tata Motors CEO & MD Guenter Butschek said, “It was a challenging year. FY18 has been a hallmark year for Tata Motors with a record breaking sales performance, increase in market share and the standalone business turning profitable before one-time exceptional charges. The turnaround continues and we have entered into Turnaround 2.0.”