Tata Motors India Limited (TMIL) on Monday reported a 57.5 per cent increase in standalone net profit in the April-June first quarter at Rs. 513.8 crore from Rs 326 crore a year ago. While the quarter marked the run-up to the proud market entry of its small car Nano, lingering worries on a pile of debt funding its new ambitions weighed heavy on the company.
Revenues fell 7.6 per cent to Rs 6404.63 crore, compared with Rs.6928.44 crore a year ago.
"We acknowledge that the company's debt is very high, and we would need to de-leverage. We are going take a decision very soon,” said C Ramakrishnan, the company’s chief financial officer.
Operating profit and margins are showing signs of a recovery. While operating margin grew from 7.1 per cent last year to 11.4 per cent this year, operating profits were at Rs 728.00 crore, an increase of 47.9 per cent as compared to the corresponding period of the previous year.
TMIL is betting on its commercial vehicles, as well as the Tata Nano to effect a turnaround. High costs continue to bite. The interest burden of Rs. 253 crore in the quarter was 125 per cent higher than a year ago.