Tata Motors reiterates focus on updated products, service at AGM

Mumbai, August 21, 2013: Concerns about Tata Motors’ passenger car division, poor quality of service and lower dividend dominated shareholders’ questions at the company’s 68th Annual General Meeting.

It was also the first AGM addressed by new chairman Cyrus Mistry and attended by managing director Karl Slym, who is a month away from completing a year as MD, and leading a new team that he brought in.

In response to some shareholders’ questions, Mistry said the company is focusing on service and admitted that “a lot remains to be done”. He reiterated that Tata Motors would continue to bring in better and updated products as the market wanted and in response to consumer feedback. One shareholder referred to the passenger division as being decimated and a “sick unit”.

On the CV front, Mistry said the company will launched updated Prima products with updated cabins as well as the company’s Ultra range along with value-added features and services.

Concerns also came up on Tata Motors’s overseas arm including Hispano-Carrocera and Tata Daewoo. While the Spanish arm has de-grown in sales and the company will look at “strategic options”, the Daewoo arm’s PAT was in a loss following payment around a labour court verdict in an ordinary wage suit filed by its union that resulted in a loss of KRW 9.2 billion or Rs 45 crore.

The company’s captive financing arm, Tata Motors Finance recorded a higher PAT of Rs 309 crore as against Rs 240 crore in the previous year. It has proposed a dividend of Rs 7 per equity share for 2012-13.

Shareholders drew comparison with Mahindra& Mahindra’s UV business to which the chairman said the company was in the process of re-positioning its products.

Mistry also said the suffered an evaluation loss of Rs 100 crore in the first quarter of the current financial year thanks to a falling rupee.

On the lower dividend, a key concern for most shareholders, Mistry said the company’s lower standalone profits were the reason for a dividend of Rs 2 per ordinary share recommended and that ‘the company had dipped into shareholder funds to pay the dividend’. Among other issues, the quality of shareholder service also came up.

The Tata Motors Group recorded a 13.4 percent increase in gross turnover from Rs 170,688 crore in the previous year to Rs 193,584 crore in 2012-13. Consolidated revenues net of excise for 2012-13 grew 14 percent to Rs 188,818 crore on the back of strong product demand , particularly those of Jaguar Land Rover. PBT and PAT were Rs 13,633 crore and Rs 9,893 crore respectively.

BRIAN DE SOUZA