Tata Motors net down 15% on lower volumes, high costs

Tata Motors on Monday said profit for the quarter to end-September fell 15.3 percent from a year ago, lagging market estimates hit by higher costs and foreign exchange losses.

[caption id=“attachment_130699” align=“alignleft” width=“380” caption=“Analysts had estimated net profit of Rs 2,067 for the quarter. Reuters”] [/caption]

Tata Motors, part of India’s salt-to-software Tata conglomerate, whose range includes the ultra-cheap Nano and British luxury brands Jaguar and Land Rover, posted net profit of Rs 1,877 crore ($374.5 million) compared with Rs 2,223 crore a year ago. Revenue was rose 26 percent to Rs 3,5940 crore.

Analysts had estimated net profit of Rs 2,067 for the quarter, according to Thomson Reuters .

The company’s margins in the September quarter were hit by lower volumes, higher marketing spend and increasing input costs for the car business, its Chief Financial Officer C. Ramakrishnan said at a press conference.

EBITDA margin grew at 7.2 percent in the July-September quarter of FY12 versus 10 percent in a year ago period. Jaguar Land Rover’s (JLR) operating margin stood at 14.9 percent in the quarter ended September 2011.

The management said JLR’s sales shot up 13.8 percent to 130,090 units in the second quarter (YoY). “We raised CV prices by 1% in Q2.”

The automaker incurred a foreign exchange loss of Rs 440 crore in the period compared with a gain of Rs 130 crore a year ago.

Tata Motors fell 2 percent to Rs 177.80, the lowest level since October 13, at the close in Mumbai today.

Major domestic rival Maruti Suzuki, India’s top carmaker, last month reported a more than halving of its quarterly net profit over the same period.

India’s car sales slumped 24 percent in October, the biggest fall since December 2000, and the fourth consecutive monthly slide.

Reuters