Tata Motors profit falls
Tata Motors Ltd , India's top vehicle maker, saw its first quarter profit drop 30 percent, as expected, on foreign exchange losses and rising input costs, and said margins would remain under pressure. Tata Motors, which is due to launch the world's cheapest car, the Nano, around October, will seek to protect margins through cost reductions, price increases and more financing options for vehicle purchases, Managing Director Ravi Kant said.
The company said April-June net profit fell to 3.26 billion rupees ($77 million) from 4.67 billion rupees a year earlier. Net sales rose to 69.28 billion rupees from 60.57 billion, compared to a Reuters poll of net profit of 3.20 billion rupees on net sales of 65.70 billion rupees. Operating margin, a key gauge of business profitability, fell to 7.7 percent from 9.0 percent a year earlier.
The company sold a 24 percent stake in its auto parts unit, Tata AutoComp Systems Ltd, and booked a profit of 1.14 billion rupees in the quarter ended June 30. But that was more than offset by a 2 billion rupee foreign exchange loss as the rupee fell 6.8 percent against the dollar. Tata Motors, also India's No. 3 car maker, sold 127,361 vehicles in the June quarter, up just 3 percent on last year.
The company will focus on new launches to boost demand, keep a close watch on inventory levels, and look to "unlock value" from other investments, Kant said.