Tata Motors sees JLR back in profit this year on cost cuts, recovery in Chinese demand; says no plans to sell British auto arm
Britain-based JLR has been at the centre of media speculation in recent months, with reports Tata might look to sell a stake and also that the unit was set to announce a major investment in Britain.
Brexit-related disruption and a slowdown in sales in China have hammered Tata’s finances
Tata said tighter control of expenses and a turnaround at JLR helped dull impact of a slowdown
Tata earned Rs 1,117 crore ($160.26 million) in net profit in January-March
Mumbai/Bengaluru: Tata Motors expects its luxury Jaguar Land Rover arm to return to profit this financial year helped by cost cuts and a recovery in Chinese demand, it said on Monday, after the group’s fourth-quarter profit fell less than expected.
Finance chief PB Balaji told reporters he expected Chinese sales of its sleek Jaguar saloons and Land Rover sport-utility vehicles (SUVs) to return to growth “a quarter from now.”
Brexit-related disruption and a slowdown in sales in China, once Jaguar Land Rover’s (JLR) fastest-growing market, have hammered Tata’s finances. Three months ago, it posted the biggest quarterly loss in Indian corporate history.
“Metrics (in China) have started stabilising, return on sales have picked up dramatically and at the same time our inventories at the dealers have come down significantly,” Balaji said. “We should start seeing China come back to growth a quarter from now,” he added.
Tata, India’s biggest automaker by revenue, said tighter control of expenses and a turnaround at JLR helped dull the impact of an economic slowdown at home as it posted its first quarterly profit for the fiscal year that ended on March 31.
Tata earned Rs 1,117 crore ($160.26 million) in net profit in January-March. That was ahead of the Rs 338 crore average of 10 analyst estimates compiled by Refinitiv IBES, though lower than Rs 2,125 crore a year earlier.
Revenue from its wholly owned subsidiary Jaguar Land Rover Automotive Plc fell 5 percent to Rs 65,146 crore. The unit brings in most of Tata’s revenue.
Britain-based JLR has been at the centre of media speculation in recent months, with reports Tata might look to sell a stake and also that the unit was set to announce a major investment in Britain. JLR announced 4,500 job cuts in January.
Balaji said Tata had no plans to sell JLR.
Last month, Tata’s domestic rival Maruti Suzuki India Ltd booked a 5 percent drop in quarterly net profit and forecast weak growth for the year ending March 2020 due in part to a consumer-led slowdown and tighter liquidity.
“In India, we expect to see next 3-6 months of tepid demand ... the near term performance is likely to be definitely impacted due to the continued slowdown in the market. This will improve as the year progresses,” Balaji said.
Tata Motors shares closed up 7.5 percent at Rs 190.15 ahead of the results. The Nifty Auto index ended up 4.2 percent amid a broader market rally.
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While all firms may not be on Layoffs.fyi list, here is a look at the major job cuts in IT, IT services and other sectors in January 2023