Tata Motors logs 57% jump in net profit

Tata Motors said on Monday its April- June standalone net profit jumped 57.54 per cent to Rs 513.76 crore (Rs 5.13 billion) riding on cost-rationalisation measures and a fall in input prices, although it sold fewer vehicles than it did a year ago.

The country's largest automobile maker's total income from operations, however, fell 7.56 per cent to Rs 6,404.63 crore (Rs 64.04 billion) in the first quarter, the company said in a statement.

"The company's continued focus on cost efficiencies, coupled with reduction of raw material prices, inventory reduction and improvement in sales realisation, yielded considerable benefits," Tata Motors said. The total vehicle sales in the quarter stood at 1,27,340 units as against 1,33,079 units in the year-ago period, a dip of 4.31 per cent.

While the passenger vehicle segment grew by 1.13 per cent at 72,216 units, but the sales of commercial vehicles fell by 4.85 per cent at 49,904 units in Q1 of this fiscal.

Tata Motors, which acquired British luxury auto brands Jaguar and Land Rover in March 2008, had earlier posted poor consolidated numbers -- a net loss of Rs 2,505.25 crore (Rs 25.05 billion) in 2008-09 mainly on account of costs associated with JLR.

The main highlight of quarter was delivering the first Nano, touted as the world's cheapest car, to customer following the car's launch in March 2009. Also the company opened the first Jaguar Land Rover showroom in Mumbai.

In commercial vehicles segment, the company unveiled its new range of world standard trucks in May.

"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," the company said.

The heavy truck segment is recovering, albeit slowly, in response to infrastructure development, government stimulus packages for the automobile industry and Jawaharlal Nehru National Urban Renewal Mission initiatives, it added.

During the quarter, the net interest cost rose by over two-fold at Rs 253.45 crore (Rs 2.53 billion) due to increased debt taken by the company during the previous year to support its product programmes, investments and working capital requirements.