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Tata Motors Q3 Net Profit Down 2% On Weak China Sales

The company said quarterly net profit for the December quarter fell 2 per cent, hit by lower sales of its luxury Jaguar Land Rover unit in China, once its fastest growing market

Tata Motors reported on Thursday (11 February) strong sales by its British Jaguar Land Rover subsidiary in Europe and North America in the last three months of last year, offsetting a drop in China, once its fastest-growing market.

Retail sales by JLR, which has been rapidly expanding its model line-up and volumes with new production planned in Europe and South America, were up nearly 50 per cent in the UK, continental Europe and North America on the same period in 2014, while sales fell 10 per cent in China, where economic growth is cooling.

Overall, India's top automaker reported a better than expected 2 per cent fall in net profits for the period, its fiscal third quarter, to Rs 3,508 crore ($514.28 million). Analysts on average had expected Tata to report a net profit of Rs 2,761 crore, according to Thomson Reuters data.

Net sales in the quarter were up 4 per cent at Rs 71,686 crore, while the operating profit margin at JLR rose to 14.4 per cent from 12.2 per cent in the preceding quarter, but was still down from nearly 20 per cent in earlier quarters.

Local production of Range Rover Evoque and Discovery Sport SUVs in China and non-recurrence of an annual tax rebate in the country lowered margins, JLR said in a statement.

The company also reported an exceptional gain of £30 million ($43 million) from insurance claims on the damage caused by a chemical explosion at Tianjin port in China last year which wrecked thousands of its cars, and expects more claims to be paid over the coming months.

Meanwhile losses in Tata's domestic business narrowed to Rs 201 crore in the quarter helped by strong demand for its trucks in the country, where economic growth is reviving, compared with a loss of Rs 2,123 crore in the year ago period.

(Reuters)


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