Tata Motors’ consolidated net profit fell sharply in the quarter ended June 30, as foreign exchange headwinds and rising input costs dented the home-grown automaker’s bottomline.
27 Aug 2016 | 4825 Views | By Shourya Harwani
Tata Motors’ consolidated net profit fell sharply in the quarter ended June 30, as foreign exchange headwinds and rising input costs dented the home-grown automaker’s bottomline.
Despite recoveries of Rs 478 crore (£50 million) on account of the Tianjin incident, the adverse foreign exchange impact of Rs 2,296 crore ...
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Tata Motors’ consolidated net profit fell sharply in the quarter ended June 30, as foreign exchange headwinds and rising input costs dented the home-grown automaker’s bottomline.
Despite recoveries of Rs 478 crore (£50 million) on account of the Tianjin incident, the adverse foreign exchange impact of Rs 2,296 crore and adverse commodity derivatives impact of Rs 167 crore in the Jaguar Land Rover business, dragged the net profit down by 57% during April-June 2016.
Consolidated net profit fell to Rs 2,260.4 crore even as the company’s net sales rose 10% to Rs 66,101.3 crore. The currency headwinds stemmed from the UK’s vote to exit the European Union, which resulted in sharp volatility in the FX market. As a result, Jaguar Land Rover’s provisions tab scaled to £123 million, compared with £109 million in the same period a year ago.
Meanwhile, Jaguar Land Rover continued its strong sales performance during the quarter with global retail sales increasing by 16% to 132,700 vehicles for the three-month period to June 30, 2016.
Sales were up across all regions. The introduction of new models, including the Jaguar XE and F-Pace, saw Jaguar retail sales increase by 76% in the first quarter to 31,800 vehicles. Land Rover also saw retail sales in the quarter grow by 4%, exceeding 100,000 vehicles for the first time, led by continued strong demand for the Land Rover Discovery Sport.
“The operating performance in the quarter reflects overall higher wholesales, offset by adverse FX impact of £207 million including revaluation of £84 million, mainly euro payables resulting from depreciation in the pound,” the company said in a statement.
Standalone results
During the quarter, all the segments of the company witnessed sales growth – M&HCVs grew by 7.8%, the LCV segment’s sales were up 11.6%, and the passenger vehicles segment grew by 6.3% with the car segment reporting a 15.1% rise on the back of a strong market response to the recently launched Tiago hatchback.
Sales (including exports) of commercial and passenger vehicles for the quarter ended June 30, 2016, stood at 126,839 units, representing a growth of 8.0%, as compared to the corresponding quarter last year.
Despite good volume growth, standalone profit fell 91% in the quarter to Rs 25.7 crore even as the net sales rose 10.2% to Rs 11,311 crore.
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