Tata Motors Surges On Strong Q4, JLR Margin Surprises

Tata Motors shares surged over 5 per cent on Wednesday after the Jaguar Land Rover (JLR) owner reported strong earnings in the January-March quarter post market hours on Tuesday. Tata Motors reported a consolidated net profit of Rs 4,336 crore in Q4 which was ahead of Street estimates. Analysts polled by NDTV Profit had estimated its net profit at Rs 2,810 crore. Tata Motors' revenue came in at Rs 77,272 crore compared to Rs 79,549 crore in the year ago quarter. Tata Motors said that its consolidated revenue came in lower by Rs 9,032 crore due to translation impact from pound to Indian rupee. Analysts polled by NDTV Profit had estimated its revenue at Rs 78,797 crore.

Tata Motors' strong show in Q4 was led by its luxury British arm JLR, which reported 18 per cent annual jump in net profit at 557 million pounds led by 61 basis points increase in its EBITDA (earnings before interest, taxes, depreciation and amortisation) margin at 14.5 per cent. JLR's revenue jumped 10 per cent annually to 7,268 million pounds.

"Jaguar Land Rover is pleased to end the fiscal year on a strong note in spite of the geopolitical and volatile economic environment. JLR believes that it has strong and exciting product actions and plans to continue to drive profitable and sustainable growth," Tata Motors said in a release to exchanges.

However, Tata Motors' domestic business posted a loss of Rs 829 crore compared with a profit of Rs 398 crore in the same quarter year ago. The company took a one-time hit of Rs 148 crore on unsold stock of older technology Euro III-compliant vehicles after a surprise court order banned their sale after March 31. Tata Motors' domestic business posted revenue of Rs 15,092 crore compared to Rs 14,148 crore year-on-year.

Meanwhile, Tata Motors yesterday said it has reduced its managerial workforce by up to 1,500 people domestically as part of an organisational restructuring exercise. "The reference (total managers) on which we started (the exercise) was in the vicinity of 13,000...we do see as far as the white collar population is concerned, an overall reduction in the vicinity of 10-12 per cent (up to 1,500)," managing director and chief executive Guenter Butschek told reporters.

Domestic brokerage Kotak Securities has maintained its "buy" rating on Tata Motors shares for a target price of Rs 560.

As of 10:12 am, Tata Motors' shares traded 3.74 per cent higher at Rs 467.35 while Tata Motors DVR shares were up 4.22 per cent at Rs 276.20. (With agency inputs)