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Tata Motors Q3 Results: Profit Beats Estimates Even As Sales Fall

Tata Motors’ net profit stood at Rs 1,738.3 crore in the December quarter against a record loss of Rs 26,993 crore a year ago.

A logo sits on the front of Tata Motors’ Nexon SUV in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
A logo sits on the front of Tata Motors’ Nexon SUV in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Tata Motors Ltd.’s quarterly profit beat estimates even as sales of its luxury car arm Jaguar Land Rover fell and Indian business continued to grapple with a deepening slowdown.

Net profit stood at Rs 1,738.3 crore in the three months ended December compared with a record loss of Rs 26,993 crore a year ago, the homegrown automaker said in an exchange filing. A consensus of analysts tracked by Bloomberg had pegged the profit at Rs 673 crore.

  • Revenue fell 6.8 percent to Rs 71,676 crore—against Rs 74,052-crore estimate.
  • Operating profit rose 20.68 percent to Rs 7,393.2 crore.
  • Margin expanded more than 300 basis points to 10.3 percent.

JLR, which contributes 80 percent to Tata Motors’ revenue, is struggling because of Brexit and a fall in demand for fossil fuel-powered vehicles. It has also planned to cut 4,500 jobs across the globe. However, sales in China have finally bounced back after an extended downturn.

Things aren’t any better for Tata Motors in India as well where the auto industry is facing its worst sales slump in at least two decades. And while the company saw a sequential improvement in sales across categories in India, the year-on-year numbers tumbled.

“The downturn in the automotive industry continued in the third quarter as the economy slowed down,” Guenter Butschek, chief executive and managing director of Tata Motors, said in a media statement. “Our financial performance was impacted due to the downturn coupled with inventory corrections we took to get ready for BS-VI.”

As the sales upbeat of the festive months could not sustain, we remain concerned about the intrinsic demand and weak consumer sentiment.
Guenter Butschek, CEO and MD, Tata Motors

Key Highlights

Jaguar Land Rover

  • Jaguar Land Rover's revenue rose 2.9 percent to 6,400 million pounds.
  • JLR’s profit stood at 372 million ponds.
  • China retail sales rose 24.3 percent year-on-year.
  • Total retail sales fell 2.7 percent over last year.

Tata Motors Standalone

  • Tata Motors standalone revenue fell 33 percent to Rs 11,000 crore.
  • Standalone profit rose 68 percent to Rs 1,040 crore.
  • Total retail sales declined 17 percent over last year.

Shares of Tata Motors closed 0.98 percent lower before the earnings announcement, compared with the benchmark Sensex’s 0.69 percent drop.