Tata Motors Ltd, the country’s largest automaker, on Wednesday reported a 30 per cent decline in net profit during the April-June quarter.
The company’s profit for the fiscal first quarter declined to Rs 326 crore from Rs 466 crore in the same period a year ago, largely on account of losses arising from the foreign exchange transactions. Volatility in exchange rates pushed up rupee-denominated interests on long-term funds that the company has raised through foreign currency convertible instruments.
The company’s revenue during the quarter, however, grew 14.4 per cent to Rs 6,928 crore.
The company’s profitability was also hampered by “abnormal input material cost increases and general inflationary trends.”
“This will continue to be a challenging year for the industry and margins will be under pressure as we expect commodity prices to remain high,” said Ravi Kant, managing director of the company. “The stagnancy in passenger car sales will also continue for sometime till the new Indica, Xenon and Nano are launched later this year.”
It has also lined up 12 new launches in the commercial vehicle segment, but the company ruled out any major cost escalation on advertising spend indicating that Nano will not require any major promotion. “We do not see any significant cost escalation on marketing of Nano,” Kant said.
Shares of Tata Motors rose 4.9 per cent in the Bombay Stock Exchange on Wednesday to close at Rs 416.30.