JLR sales rev up Tata Motors balance sheet

Tata Motors has swung into profit zone on a consolidated basis in the year that ended March 31, 2010. The company posted net profit of Rs 2,571 crore (consolidated) in FY 10, as compared to a loss of Rs 2,505 crore the previous year.

The company’s premium car business unit of Jaguar-Land Rover posted net profit of £3 million during the year, with a £ 73 million profit during the January-March 2010 quarter. JLR volumes grew in its key markets during the quarter on a year-on-year basis. There are concerns for JLR’s business due to the uncertainty over the Euro zone crisis though.

However, China has played a more important role in sales this year. Tata Motors’ Group CEO Carl Peter Forster says the recent success in China has been “particularly pleasing” and the company expects annual sales of 5,000 Jaguars and 20,000 Land Rovers in that market. Tata Motors’ Korean subsidiary of Tata Daewoo Commercial Vehicles saw a dip in its net profit from Rs 111 crore in Q4 of last year to Rs 82 crore during the quarter ended March 31, 2010.

On a standalone basis, Tata Motors’ net profit more than doubled to Rs 2,240 crore in FY 10, as against Rs 1,001 crore last year. Net revenue grew 39 percent to Rs 35, 593 crore. The sale of a 20 percent stake in the Tata-Hitachi JV also raked in Rs 1,100 crore into the company. Tata Motors’ profitability also improved with EBITDA margin growing to 11.74 percent in FY 10 from 6.84 percent during the previous year.

During the year, Tata Motors sold 30,763 units of the Nano. It may have had a good year, but Tata Motors officials also had a word of caution about factors like rising commodity prices and increased competition in the Indian market and a shorter product lifecycle. C Ramakrishnan, CFO, Tata Motors, said it will continue with its average annual investment of Rs 2,500-3,000 crore in India,

as will its British arm — JLR — which has an annual capex of £ 600-700 million. Group CEO Carl Peter Forster says Tata Motors is poised for a major expansion globally, with LCVs playing a key role in its endeavour to go global in a “massive scale”.