Tata Motors Ltd (TML) on Thursday topped Street estimates when its consolidated net profit for the first quarter ended June 30 zoomed 74 per cent on a strong showing from Jaguar Land Rover (JLR).
The homegrown auto major posted a net profit of ₹5,566 crore against ₹3,203 crore in the corresponding period of the previous year. Analysts were expecting the company to post a net profit of around ₹5,100 crore.
These better-than-expected numbers came on a day when its board approved the company’s demerger into two separate listed entities.
As a part of the scheme, TML will demerge its commercial vehicle undertaking involving the commercial vehicle business and all its related investments into TMLCV (TML Commercial Vehicles).
Further, the existing passenger vehicle business in TMPV, will be merged into TML, which is the listed entity. TMPV is a wholly owned subsidiary of TML. After the scheme is effected, the entire paid-up share capital of TMPV will be cancelled in its entirety.
Shareholders of TML will receive one share of TMLCV for every share held in the current listed entity.
During the quarter, TML saw its consolidated revenues rising to ₹107,316 crore from ₹101,528 crore in the corresponding period of the previous year. On a standalone basis, the auto maker said its net profit stood at ₹2,190 crore compared with a net loss of ₹64 crore in the year-ago period.
The performance was led by JLR, which posted revenues of £7.3 billion during the quarter — its highest ever, a rise of 5.4 per cent over the previous year period. During the quarter, its profit before tax jumped 59 per cent to £693 million.
TML added that JLR’s financial performance was driven by higher wholesale volumes, investment in demand generation and a favourable pricing environment.
The passenger vehicle business saw revenues falling 7.7 per cent over the previous year to ₹11,800 crore. Tata Motors added that the business after witnessing a boost in demand initially saw a decline in retail (registrations) in May and June.
“We expect an improvement in overall sales with the onset of the festive season and the launch of Curvv, India’s first SUV Coupe,” Tata Motors passenger vehicles MD Shailesh Chandra said.
