Tata Motors profits dented by slow sales
Mumbai (AFP) - India's Tata Motors reported a surprise drop in quarterly net profit Friday, hit by heavy investment at its British luxury subsidiary and higher taxes.
Consolidated net profit slipped to 32.91 billion rupees ($533.82 million) in the three-months-to-September from 35.42 billion rupees a year ago.
The earnings of Tata Motors, part of the sprawling Tata tea-to-steel conglomerate, significantly undershot a consensus market profit forecast of 46.2-billion rupees.
"We had an unexpected reversal of tax credits in the quarter... and there are costs related to high investment going into JLR (Jaguar Land Rover)," C. Ramakrishnan, president and chief financial officer, told reporters.
Consolidated revenue rose 6.5 percent to 605.64 billion rupees in the three-months-to-September from a year earlier.
The Mumbai-based firm's tax bill totalled 7.38-billion rupees, a reversal of the company's tax credit earnings of 1.8-billion rupees in same period a year ago.
Losses at Tata's Indian operations swelled nearly 130 percent to 18.46 billion rupees.
There was also a profit fall at Tata's British luxury marque JLR unit, the firm said.
Net profits at JLR shrank to 450 million pounds ($704.86 million) in the quarter from 507 million in the same year-ago period even though sales of the premium brand grew eight percent.
Tata Motors is now hugely reliant on the revenues from JLR, which it bought for $2.3 billion from Ford in 2008 at the height of the global financial crisis.
The purchase, seen by auto analysts at the time as a risky gamble, has paid off dramatically with the iconic premium cars now driving Tata Motors' profits.
Tata Motors management, meanwhile, said it is hoping for a "negotiated settlement" to a pay dispute embroiling workers at its JLR operations in Britain.
British news reports have quoted union leaders at the JLR plant threatening strike action if the company insists on changes to salary and pension schemes.
