An over Rs 710-crore insurance claim for the 2015 Chinese shipyard blast helped Tata Motors remain profitable marginally in the December quarter as its bleeding domestic business reported a 10-fold jump in losses, yanking down group profit by a huge 96.22 per cent at Rs 111.6 crore. The country’s largest auto company and the second best profit centre for the Tata Group had posted a net profit of Rs 2,952.67 crore in the December 2015 quarter.
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The bottom line was also dragged down by near 500 bps dip in margins at its British cash-cow Jaguar Land Rover (JLR), which narrowed its profit by a hefty 62 per cent at 167 million pounds from 440 million pounds a year ago, Group Chief Financial Officer C Ramakrishnan told reporters. Despite red-marks all over the business, Managing Director and Chief Executive Guenter Butschek sounded bullish about the future of the company and described Q3 as “very good show”, citing the revival of the its struggling passenger car business which has outgrown the industry by three times.
“We are on track with the best-ever product portfolio, which helped us do exceptionally well. We grew three times faster than the industry despite strong headwinds from noteban. We will remain agile and be faster to market going forward,” Butschek, who has completed one year in office, told reporters.
The company received payback worth 85 million pounds (over Rs 710 crore) from Chinese insurance companies for the Janjin blasts in 2015 which led to a loss of over 240 million pounds of inventory, Ramakrishnan said. In the same quarter last year, this was only 30 million pounds, he said, adding the company has only 20 million pounds to be recovered.
Despite a massive improvement in its passenger vehicles business, the parent reported a 10-fold spike in net loss at Rs 1,046 crore in the third quarter from Rs 137 crore net loss a year ago. The gains in PV segment were frittered away by de-growth in the high margin heavy vehicles business and a flat growth in LCV business.
Group sales slipped 2.2 per cent to Rs 67,864.95 crore from Rs 69,398.07 crore in the year-ago period.
The revenue (net of excise) of the standalone business (including joint operations) inched up to Rs 10,167 crore from Rs 10,019 crore, up 1.5 per cent, while Jaguar Land Rover saw its revenue slip 13.1 per cent to 6,537 million pounds from 5,781 million pounds. But the impact on bottomline was much harder as JLR net plunged 62 per cent to 167 million pounds from 440 million a year ago.
Tata Motors stock got hammered in the market, falling over 8 per cent in intra-day trade before recovering some ground and closing down 3.6 per cent at Rs 486.80.