JLR power: Tata Motors profit trebles
Ratan Tata-led Tata Motors' consolidated net profit more than trebled to Rs 9,273.6 crore in the fiscal year ended March from Rs 2,571 crore in the previous year, powered by its UK-based luxury car unit Jaguar Land Rover. HT reports. From Britain with lovebusiness Updated: May 27, 2011 01:57 IST
It is not the world’s cheapest car meant for Indian masses, but ultra luxury vehicles for the rich in emerging BRIC economies that is leading Ratan Tata-led Tata Motors in a strong rebound on the global automobile map.
The company’s consolidated net profit more than trebled to Rs 9,273.6 crore in the fiscal year ended March from Rs 2,571 crore in the previous year, powered by its UK-based luxury car unit Jaguar Land Rover (JLR).
Tata Motors said on Thursday it sold 1.08 million vehicles during the year of which 243,621 were JLR units.
While the cheap car Nano rolled late from Gujarat after its political troubles linked to land acqusition in the original launch state, West Bengal, the UK acquisition of JLR in 2008 turned in a net profit of Rs 7,675 crore as a growing tribe of global millionaires fuelled luxury demand.
“We are cautiously optimistic about JLR sales. We are focussing on emerging markets such as China, Russia, India and Brazil for future growth,” said Carl Peter Forster, managing director and CEO, Tata Motors.
JLR’s own earnings before interest, taxation, depreciation and amortisation (EBITDA) margin rose to 16.3% from 6% a year earlier.
Had JLR not turned around, Tata Motors would have announced a decline in its profits as the company’s standalone (Indian unit) profit for the year stood at Rs 1,811.8 crore as against a net profit of Rs 2,240 crore last year.
Consolidated revenues rose 30.7% to Rs 123,222 crore in 2010-11, up from Rs 94,312 crore in the previous year.
“China has emerged as our third largest market (after US and UK),” said Ralf Speth, managing director of JLR.In the domestic market, Tata Motors will launch a few variants of Nano this year along with an all new Safari and a 2-wheel drive version of Aria.
While Nano sales crossed 100,000 last fiscal, the company may launch a diesel variant of Nano this fiscal.
The company has also earmarked a £1.5 billion capital expenditure plan for JLR.
UK and US continue to be the biggest markets for JLR, accounting for 24% and 22% of its total sales, respectively. China, the third largest market, accounts for 11% of its sales.
JLR’s net debt came down significantly in the last one year, as increased cash flows brought down the burden of loans.