Tata Motors' turnaround strategy starts showing results

Tata Motors, which has embarked on an aggressive turnaround strategy earlier this year and aims to regain 5 percent market share both in the commercial vehicle and passenger vehicle segments, has posted sharply improved performance.

A strong show from the company-owned luxury car brand Jaguar Land Rover (JLR) and improved results in its domestic business from its passenger vehicle and commercial vehicle divisions, is proving that its three-pronged ‘attack’ game-plan has made the right moves.

The company reported Q2 FY2017-18 consolidated net profit of Rs 2,502 crore, a massive increase of 195 percent (FY2017: Rs 848 crore), even as its revenue (net of excise) touched Rs 70,156 crore, an increase of 10 percent (FY2017: Rs 63,577 crore). In 2016-17, Tata Motors reported a loss of Rs 2,800 crore, despite Rs 49,100 crore sales turnover in 2016-17.

The company’s Q2 results show a positive improvement as a result of many cost reduction measures along with improved CV and PV sales. This has helped the company reduce its losses by more than 50 percent (Q2 FY2018: Rs 295 crore vs Q2 FY2017: Rs 631 crore).

Tata Motors’ domestic business reported revenues of Rs 13,400 crore (net of excise) translating to 30 percent growth, witnessed by pick-up in its CV sales (13.8%) and PV sales (14.4%).

Commenting on the results, Guenter Butschek, MD and CEO, Tata Motors, said, “After a challenging first quarter, Tata Motors has demonstrated impressive results with month-on-month growth in sales and market share, enabled by a slew of new product launches and customer-centric initiatives. With our turnaround plan in full action, we are seeing encouraging results and we will continue to drive sustainable profitable growth to meet our future aspirations.”