Tata Motors Q4 consolidated net profit down 50% at Rs 2,176 crore, misses estimates

An average of estimates of 14 analysts polled by Reuters pegged the company’s consolidated net profit to come in at Rs 4,041 crore.

Tata Motors, India’s largest automotive player by revenue, on Wednesday missed analysts’ expectations with a 50-percent year-on-year fall in its consolidated net profit for the March quarter to Rs 2,176.16 crore.

An average of estimates of 14 analysts polled by Reuters pegged the company’s consolidated net profit to come in at Rs 4,041 crore. The fall in bottom line was primarily due to a Rs 1,641.38-crore impairment of capital work in progress.

Revenue from operations grew 16 percent on year to Rs 91,279.09 crore in the quarter under review. The Reuters poll had expected revenues to come in at Rs 89,507 crore.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) came in at Rs 11,250 crore, 3.7 percent higher than in the same quarter a year ago. EBITDA margin for the quarter contracted to 12.3 percent from 14 percent last year.

“FY18 has been a hallmark year for Tata Motors with record-breaking sales performance, increase in market share, and the standalone business turning profitable before one-time exceptional charges,” said Guenter Butschek, Managing Director and Chief Executive Officer, Tata Motors.

During the reporting quarter, the company’s luxury-car subsidiary Jaguar Land Rover saw its sales decline 4 percent on year to 172,709 units. The fall was primarily due to lower UK sales, and to a lesser extent lower sales in Europe. UK industry sales were down 12.4 percent in the quarter, more than explained by lower diesel sales.

Jaguar Land Rover’s revenue for the quarter ended March came in at 7,555 million pounds, 4 percent higher than in the same quarter last year. Its pre-tax profit, however, fell 46 percent over the period to 364 million pounds.

Tata Motors’ standalone sales posted a solid jump of 36 percent to 204,255 units in the fourth quarter, as against 150,448 units in the same period last year. Domestic sales were up 39 percent at 187,874 units from 135,416 units.

“We want to structurally improve the business with reinforced and focused actions in passenger vehicles, and continuing the momentum in commercial vehicles from last year. Our future pipeline is full of attractive products, bundled in the most desirable and customer-centric service offerings,” Butschek said.

For the reporting quarter, Tata Motors’ net profit from joint ventures and associates stood at Rs 845 crore, up from Rs 411 crore in the same quarter last year. Higher interest income resulted in other income growing 55.5 percent on year to Rs 364 crore.

The company’s finance cost for the quarter increased marginally to Rs 1,178 crore, primarily due to an increase in both Tata Motors’ and JLR’s borrowings. Tata Motors’ consolidated debt rose to Rs 39,977 crore as on March 31, from Rs 27,485 crore at the end of March last year.

In its post-results statement, the Tata Group company said that its effective tax rate for FY18 was 32.3 percent, largely because of tax credits in the standalone business not getting recognised and because of a one-time impact due to lower tax rates on deferred tax assets in the UK and US.


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