Driven by a strong performance by its British acquired arm, JLR, TATA Motors on Monday posted a consolidated net profit of 5,177 crores in Q4, ended March 31. This figure is well over two times as much as the one they posted in the fourth quarter preceding this one.
The company has attributed this success to the strong operating performance by JLR and efficient financial management. Earlier in the year, the company was set back by about Rs. 1,580 crores due to depreciation and amortization expenses, adverse revaluation, and an industry-wide recall of vehicles for potentially faulty airbags.
Owing to the standalone net sales of Rs. 12,459.51 crore in the same quarter, the standalone profit for the same quarter was Rs. 464.99 crores, as opposed to the Rs. 1,164.25 crore loss in the corresponding quarter in the year before. These figures made up for the dull figures in the preceding quarters, making the standalone profit for the year to come to Rs. 234.23 crore.
The profit after tax for the company’s current business USP Jaguar reported a profit (after tax) of about GBP 472 million in the FY2016, compared to the FY2015 profit of GBP 301 million. The net sales increased by 4.56% (from Rs. 2,60,734.33 crore to Rs. 2,72,645.84). This can not be only attributed to the sales volume as the automobile industry has seen a global rise in price.
As far as shares and dividends are concerned, the board has approved a dividend of Rs. 0.20 per Rs. 2 shares and of Rs. 0.30 on ‘A’ ordinary/preferential shares of the same value.
Expected to become the fourth largest automobile market by 2020, India has the potential to offer local car makers the space that they desire. However, the local market is also expected to thrive with cheaper foreign company cars, as PM Modi pushes his ‘Make in India’ campaign. TATA Motors may have Jaguar under their belly, but we all know what happens when the Germans and Italians intervene.