CV sales impact Tata Motors FY2017 numbers despite strong performance by JLR

Tata Motors, which announced its financial results for the January-March 2017 quarter (FY2017 Q4) and FY2017, has reported consolidated revenues (net of excise) of Rs 77,272 crores as against Rs 79,549 crore in Q4 FY2016, down 2.86 percent. Consolidated profit before tax for Q4 FY2017 was Rs 5,166 crores, down 12.26 percent (Q4, FY2016: Rs 5,888 crore). Consolidated profit after tax for the quarter was Rs 4,336 crore, down 16.80 percent (Q4 FY2016: Rs 5,211 crore).

For fiscal year 2016-17, consolidated revenues (net of excise) were down 1.2 percent at Rs 269,850 crore against Rs 273,111 crores for the previous year. Consolidated profit before tax for FY2017 was Rs 9,315 crore against Rs 14,126 crore for the last year. Consolidated profit after tax was Rs 7,557 crore, as against Rs 11,678 crore in FY2016 – down by 35 percent.

According to the company, CV sales in Q4 were impacted due to weak replacement demand, subdued freight demand from the industrial segment, demonetisation, and lower-than-expected pre-buying ahead of the implementation of BS IV on April 1. While M&HCV sales fell 2.2% YoY, LCV numbers were down 6.1% YoY. Passenger vehicles sales grew 44.3% YoY on the back of continued strong response to the Tiago hatchback and the launch of the Hexa SUV and Tigor sedan. Exports de-grew by 8.7% YoY. Sales (including exports) of commercial and passenger vehicles for the quarter ended March 31, 2017, stood at 151,606 units, up 4.9 percent.

Commenting on the results, Tata Motors said: “It has been a challenging and highly volatile year, which followed a period of low demand and inconsistent recovery in the prior years in the automotive sector in India.  In addition, the company also under-performed on many fronts, amplifying the impact of the external environment.  On the way forward, we have detailed actions under focused implementation, and expect to significantly enhance the overall business performance in the coming periods.”

JLR on a high
The Tata Motors-owned Jaguar Land Rover reported a strong fourth quarter to finish the financial year with solid results. Retail sales were a record 604,009 vehicles, up 16% on the previous year led by the Jaguar F-Pace and continuing strong demand for the Land Rover Discovery Sport and other models in the Jaguar Land Rover portfolio. Retail sales were up year-on-year in China (32%), North America (24%), the UK (16%) and Europe (13%).

Revenue for the full year was £24.3 billion, reflecting the higher sales volumes. Profit before tax was £1.6 billion, up £53 million compared to last year, with favourable volume and mix as well as £151 million of recoveries in 2016/17 (related to the 2015 Tianjin port explosion).  This was offset by, higher marketing costs, depreciation and amortisation and other items.

Future outlook
Tata Motors says it will be looking to expand its presence in plug-in hybrids and battery electric vehicles. It expects to benefit from the increased spend on infrastructure and rural projects, the overall favourable GST impact and a nomral monsoon, all of which are positives for the commercial vehicle sector. The company expects to see a 10 percent growth in its LCV and bus business  in FY2018.

On the M&HCV front, the company aims to regain its over 60 percent market share in the above 16-tonne segment over the next two years.

(With inputs from Nilesh Wadhwa)