Tata Motors sales up, returns to profit

The country's largest automobile manufacturer, Tata Motors reported a net profit of Rs 400.14 crore for the quarter ended December 31, 2009 against a loss of Rs 263.26 crore, in the same period in 2008.

The country's largest automobile manufacturer, Tata Motors reported a net profit of Rs 400.14 crore for the quarter ended December 31, 2009 against a loss of Rs 263.26 crore, in the same period in 2008.

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The company's total income grew by 88.7 per cent to Rs 8,979.9 crore in 2009, more than compensating for the slowdown induced 34.38 per cent fall in income in 2008 over 2007. Bulk of the growth came as a result of higher sale of vehicles. In absolute numbers the company's sales during the period went up by 67.5 per cent. Commercial vehicles, where the company has a domestic market leadership, lead the charge with a 88.75 per cent growth.

"There has been a huge swing in performance in the last quarter over 2008," said C Ramakrishnan, chief financial officer, Tata Motors. "Our operating margin has improved by 8 percentage points to 12.83 per cent. A range of factors from government stimulus packages to introduction of new products have helped in the revival."

The improved performance comes despite higher spendings. Raw materials went up by 68 per cent, and overall expenditure was up 66 per cent.

The company said it would continue to invest in product advancement despite short-term challenges such as rising interest rates and commodity prices, and lack of clarity on emission norms.