Financial Daily from THE HINDU group of publications
Saturday, Oct 30, 2004
Corporate Results - Cars
Tata Motors Q2 PAT rises 49.6 pc
Mumbai , Oct. 29
TATA Motors Ltd on Friday reported a 49.6 per cent rise in profit after tax for the quarter ended September 30, 2004, to Rs 309.21 crore as against the previous corresponding Rs 206.68 crore.
The operating margin at 12.5 per cent (13.8 per cent) continued to be under pressure due to high input costs.
Net sales/income from operations was up 30.5 per cent to Rs 4,147.05 crore (Rs 3,177.73 crore for the year ago period). Total vehicle sales increased by 22.33 per cent to 95,576 units (78,125 units).
Other income moved up to Rs 70.59 crore (Rs 22.78 crore). It included a profit of Rs 28.53 crore on part sale of Tata Motors' equity stake in Haldia Petrochemicals. Net interest was higher at Rs 39.78 crore (Rs 25.99 crore).
Mr Praveen Kadle, Executive Director, Tata Motors, attributed the rise in interest to gains last year from the income-tax refund.
According to him, the company's balance sheet size is Rs 7,537 crore with surplus cash/investments amounting to Rs 3,503 crore. Gross debt is Rs 2,863 crore but net debt (after netting surplus cash) is a negative Rs 640 crore.
Inventory has reduced to 33 days of sale (36 days) and receivables are at nine days (16 days). On a net basis, negative working capital continues. Though volumes are evenly split, revenues come in a 60:40 ratio from trucks and passenger vehicles.
Tata Motors' six subsidiaries together returned a profit before tax of Rs 48.4 crore (Rs 10.7 crore) on a total turnover of Rs 592.2 crore (Rs 238.5 crore). This included its Korean arm, TDWCV, which had a profit before tax of Rs 6.7 crore on revenues of Rs 300 crore.
Over July-September 2004 TDWCV sold 1,198 units (902 units).
Its market share has steadily improved from 26 per cent in Q1 calendar 2004 to 28.5 per cent by Q2 and 31.4 per cent by Q3, Mr Ravi Kant, Executive Director, Tata Motors, said. The company's domestic market share in CVs was 59.8 per cent and that in HCVs, 68.5 per cent (61.1 per cent).
With truck sales growing at a progressively slower pace on an enlarging base, he said, the market may rule flat to marginally up in the year ahead. Also to consider are a host of issues from the 5-6 year-business cycle already being in its third year to pricing pressure caused by higher input costs.
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