The Hindu : Business : Tata Motors net profit up 19 p.c. at Rs. 527 crore

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Thursday, Nov 01, 2007
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Tata Motors net profit up 19 p.c. at Rs. 527 crore

Staff Correspondent

— PHOTO: VIVEK BENDRE

PRESSURE ON MARGINS: Ravi Kant (right), Managing Director, Tata Motors, with C. Ramakrishnan, Chief Financial Officer, at a press conference in Mumbai on Wednesday.

MUMBAI: In an environment of higher input costs, increased competitive activity and a higher interest rate regime, Tata Motors, with pressure on its operating margins, has reported a 19.3 per cent growth in the net profit at Rs. 526.84 crore for the second quarter of 2007-08 against Rs. 441.72 crore in the corresponding quarter in the previous year.

The company’s revenues (net of excise) on a stand-alone basis were Rs. 6672.65 crore (Rs. 6,585.20 crore) and the profit before tax was Rs. 621.20 crore (Rs. 586.40 crore). The company has initiated multi-pronged action, including cost reduction and introduction of new products.

During the period, the company produced 81,201 commercial vehicles (82,631 units in the same period last year) and sold 71,112 units (70,811 units). It produced 54,474 passenger cars and utility vehicles (57,665 units) and sold 51,618 vehicles (54,830 units).

During the period, the company improved the market share in medium and heavy trucks but lost the market share in the bus segment mainly on account of certain supply chain shortages.

In passenger vehicles, there has been a marginal loss of market share due to new entrants in a slowing market and delays in certain product introductions, which should be corrected in the next year. The company has also announced a 2.5 per cent rise in the prices of its commercial vehicles from October 1.

Addressing the media here, Ravi Kant, Managing Director, Tata Motors, said, “overall sales have been lower due to higher interest rates which in the last one year and half have moved up by 3.5-4 per cent and the drying up of vehicle financing as financiers were a lot more cautious while lending. However, in commercial vehicles, there is another factor.

“The earlier Supreme Court ban on overloading has been relaxed in some States and that has affected the medium and heavy commercial truck sales.”

The company’s proposed Rs. 1 lakh car was on schedule and would be launched “in the middle of next financial year, although some challenges remain,” Mr. Ravi Kant added”

The company’s new Pantnagar plant for the Ace family of commercial vehicles has commenced production and rolled out 2000 units in October.

The company will start rolling out its passenger vehicles from Fiat’s Ranjangaon plant from 2009.

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