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Tata Motors announces record profits

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Tata Motors, the country’s biggest automaker, today posted a consolidated net profit of Rs 2,516 crore for the year ended March 31, on the back of a robust pick-up in Jaguar and Land Rover (JLR) business.

TataThe company, which did not provide separate results for the fourth quarter, had posted a consolidated loss of Rs 2,505 crore in 2008-09, as demand for the two luxury brands hit new lows, following the global economic crisis.

About 60 per cent of the company’s revenue comes from sales outside India — primarily from JLR and Tata Daewoo operations. Tata Motors has recommended a dividend of Rs 15 per share and Rs 15.50 per ‘A’ ordinary share for the year.

Carl-Peter Forster, managing director and group chief executive officer of Tata Motors, said: “It (JLR) has the potential and we have made our first step. The new Jaguar XJ is an important step forward and we believe that all the brands have considerable opportunities. We have an impressive product portfolio.”

A one-time gain of Rs 1,751.54 crore also helped boost the net profit. The one-time gain was a result of profit on sale of 20 per cent stake in Telcon, the construction equipment joint venture it has with Hitachi.

Under the exceptional items list, a loss of Rs 339 crore in 2008-09 on account of exchange loss turned into a gain of nearly Rs 85 crore on revaluation of foreign currency during the reported year.

Consolidated net sales rose 29.6 per cent to Rs 91,893 crore, against Rs 70,880 crore in 2008-09.

Tata Motors will invest £600-700 million (Rs 4,100-4,700 crore) for new product development under the JLR brand in 2010-11. In addition, it would spend Rs 2,500-3,000 crore towards capital expenditure for its own portfolio this year.

Wholesale volumes for JLR stood at 193,982 units, against 167,348 units sold during June 2008 and March 2009. Standalone sales grew to 667,971 units, compared to 506,421 units.

The sovereign debt crisis in the Euro zone, one of JLR’s top three markets, has already had a minor impact on demand for the JLR range.

“The traffic has somewhat slowed down in Europe in the past two-three weeks, but we are confident that the market will bounce back quickly,” added Forster.

Standalone net profit rose more than two-fold to Rs 2,240 crore from Rs 1,001 crore in 2008-09. Net sales rose 39.6 per cent to Rs 35,373 crore, compared to Rs 25,323 crore.