— PHOTO: SHASHI ASHIWAL

FOR A BROADER PRESENCE: P. P.Kadle (right), Executive Director, Finance and Corporate Affairs, Tata Motors, with Ravi Kant, Managing Director, announcing the company's results in Mumbai on Tuesday.

MUMBAI: A spurt in sales of commercial vehicles and an unexpected foreign exchange gain helped Tata Motors register a 12 per cent jump in its net profit for the third quarter ended December 31, 2006, to Rs. 513.17 crore from Rs. 460.23 crore in the corresponding quarter of last fiscal. Revenue for the quarter stood at Rs. 6,956.84 crore against Rs. 5,074.86 crore, an increase of 37 per cent.

There was, however, a marginal dip in its international business during the quarter as the company had to pull out of some export markets to avoid the negative impact of exchange rate fluctuations.

The consolidated revenue of the company for the quarter was Rs. 8,176.03 crore, an increase of 37 per cent, while the consolidated net profit was Rs. 602.07 crore, up nine per cent as compared to the year-ago quarter.

The volume of vehicle sales rose from 1.11 lakh units in the third quarter of last fiscal to 1.41 lakhs in the last quarter, an increase of 28 per cent. The sales in the first nine months of the current fiscal crossed 4.07 lakh units, with this period seeing the launch of a new Tata Safari range, face-lifted Indigo Sedan and Indigo Marina range and a new 1.2 ltr engine option on the Indica V2 Xeta range.

International Business:

Talking to presspersons here on Tuesday, Ravi Kant, Managing Director, said the adverse exchange rate had led to the company pulling out of certain geographies. "However, we are going back into the (global) markets from this quarter," he added.

The exchange risk fluctuations, he said, have prompted the company to devise a new strategy to de-risk its international business.

The new strategy will lead the company to have a broader portfolio of geographies and consolidate its "physical presence" in the international market.

"By just exporting, you cannot effectively de-risk the international business. You need to have a physical presence (in those markets) to reduce the risks," he pointed out.

In response to a question, he said the company's foreign exchange exposure at any given point of time was at present $1 billion.

Fiat's offer

On the company's Rs. 1 lakh a car project, Mr. Kant said machines had begun to arrive at the project site at Singur in West Bengal and efforts were on to make up for the lost time. "The 2008 deadline still holds good as of now," he said.

He said Fiat, which has recently concluded a joint venture agreement with Tata Motors, had offered to help with technological and other inputs for the small car project. He, however, said that the design and other critical aspects of the project had been frozen with vendors finalised for almost two-thirds of the total material cost.

On the joint venture with Fiat, Mr. Kant said it was progressing well and the new products of the venture were expected to roll out in 2008.

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