Strong growth in volumes for its British luxury car brand Jaguar Land Rover helped homegrown Tata Motors triple its consolidated net profit in the quarter ended March to Rs 1,716.5 crore, while net sales grew 18.76% to Rs 79,926.8 crore.
JLR’s net profit rose 56.29% to 472 million pounds (Rs 4,629 crore) while net sales increased 13.18% to 6,594 million pounds (Rs 64,681 crore). The profits included a one-time gain of 58 million pounds (Rs 555 crore) on account of insurance claims related to the losses due to the Tianjin blasts.
With the help of new models like the Discovery Sport and Jaguar XE, JLR sold a total of 158,213 units during the quarter, up 28%. For the full year that ended in March, the company sold 521,571 units, up 13% over a year ago.
A turnaround in the India business, thanks to healthy growth in the medium- and heavy-duty truck segment also aided the consolidated profit. The company’s domestic operations reported a net profit of Rs 465 crore in the quarter against a loss of Rs 1,164 crore a year ago.
Speaking on the growth outlook for the company’s CV business in FY2017, C Ramakrishnan, CFO, Tata Motors, said that growth in heavy commercial vehicles is expected to remain ‘buoyant’ thanks to the ensuing replacement demand as well as for the need for fleet expansion.
However, Ravi Pisharody, executive director, Commercial Vehicles, Tata Motors clarified that strong growth momentum seen last year in the M&HCV segment due to a low base is not likely to be repeated this year and growth is likely to settle at 15-17% in 2016-17 from 30% in the last fiscal.
Commenting on JLR’s strategy for the current fiscal, Ramakrishnan said that the luxury carmaker will continue to invest in new products, technology and manufacturing capacity to grow profitably. The company has earmarked a sum of 3.75 billion pounds for capital expenditure in 2016-17.
Speaking on the growth for the company’s domestic passenger vehicle business, Guenter Butschek, MD, Tata Motors, said that the launch of the Tiago is the first milestone in the transformation of the brand in India and the launch of the upcoming cars like the Nexon, Kite 5 and Hexa will help in the complete overhaul of Tata Motors in the passenger vehicle market.
On May 20, Tata Motors delivered the first 100 Tiagos to customers in Chennai.
"We presented our overall transformation plan to the board. It got approved. We discussed brand repositioning and brand identity. We can now go full steam ahead," said Butschek.Butschek also elaborated that the he was surprised at the response the Tiago has received from the market, which is beyond the company's expectations. "The Tiago has gained great momentum and exceeded our expectations. We have received 20,000 confirmed orders for the Tiago and around 140,000 enquiries since its launch eight weeks ago," he said.
The better-than-expected response has resulted in the company adding a second shift at its Sanand plant in Gujarat, where the Tiago is made. "We will see significant increase in the output of the Tiago in the coming weeks and this will lead to a much larger exposure of the car on the roads," Butschek said.