Tata Motors reports Rs1,108-cr net profit for Q4 FY19
20 May 2019
Tata Motors reported a surprise Rs1,108-crore net profit for the January-March quarter of the 2018-19 financial year, the first quarterly profit for the full fiscal.
Consolidated net profit of Tata Motors, however, was down 49 per cent compared to its net profit of Rs2,175 crore during the year-ago quarter.
Revenue of the company declined to Rs86,422 crore from Rs89,928.97 in the January-March 2017-18 quarter.
The operating profit or EBITDA was at Rs 8,449.5 crore, while the margin stood at 9.8 percent.
Tata Motors attributed the profit to tighter control of expenses at its Jaguar Land Rover (JLR) unit that resulted in a turnaround at the British carmaker, which also helped limit the impact of economic slowdown at home, the company stated in a regulatory filing.
JLR generated positive free cash flow of £1.4 billion in Q4’19 leading to significant improvement in FCF for FY19 (-£ 1.3 billion).
JLR revenue for Q4 was at £7,134 million helped by rising sales in the UK and the US. This was, however, down £421 million year-on-year as weaker China market conditions were partially offset by growing demand in key markets like the UK and US.
With strong liquidity as of 31 March 2019 of Rs61,100 crore (cash and cash earnings of Rs42,100 crore and committed lines of Rs19,000 crore) the company recommended a dividend of Rs1 per ordinary share of 2 each and Rs1.10 per ‘A’ ordinary shares of Rs2 each for FY19, subject to approval of shareholders.
Tata had promised “decisive action” to cut costs at JLR and improve cash flow after weak sales at the British luxury car brand led Tata to its biggest quarterly loss.
Revenue from wholly owned subsidiary Jaguar Land Rover Automotive Plc fell 5 per cent to Rs65,146 crore. The unit brings in most of Tata’s revenue.
“Our domestic business delivered a resilient performance in the face of challenging market conditions. We have continued to step up our pace of innovation, improved our market shares as well as our profitability. The ‘Turnaround 2.0’ strategy is delivering well, and I am confident that the business is getting the building blocks in place for long term success,” chairman N Chandrasekaran said.
“In JLR, we continue to face challenges in China which we are addressing on priority. To weather the volatile external scenario, we are taking decisive steps to step up competitiveness, reduce breakeven and improve cash flows whilst continuing to invest in exciting products and leading-edge technologies. With these structural interventions, I see Tata Motors Group building the right business model to deliver Competitive, Consistent and Cash Accretive Growth over the medium to long term,” he added.
Shares of Tata Motors closed up 7.5% at Rs190.15 ahead of the earnings release. The Nifty Auto index ended up 4.2 per cent amid a broader market rally.