Mahindra Q4 profit jumps 14.4% on better UV, tractor sales

JLR, Jaguar XE JLR India launches the all new XE at Rs 39.90 lakh. Photo: Twitter Tata Motors Ace Mega Tata Motors reported a stellar set of numbers for the March quarter. Strong sales growth of Jaguar Land Rover (JLR) across geographies and robust commercial vehicle growth in the domestic market led to a 19% year-on-year consolidated revenue growth at Rs 80,684 crore in the March 2016 quarter. The company's consolidated profit after tax for the quarter grew 201% to ₹5,177 crore year-on-year. 

The auto major's stronger operating performance both in standalone as well as Jaguar Land Rover business and lower net finance expenses were partly offset by higher depreciation and amortisation expenses, adverse revaluation of euro payables and one-time charges of ₹1,580 crore (£166 million).

This was due to an industry-wide recall in the US of potentially faulty airbags supplied by Takata, doubtful debts and previously capitalised investment in the Jaguar Land Rover business.

For the financial year 2015-16, Tata Motors clocked consolidated revenues of ₹2,75,561 crore against ₹2,63,159 crore for the corresponding period last year. After exceptional items, consolidated profit after tax for the fiscal year was down 21% to Rs 11,024 crore. 

However, the year has been an eventful one for JLR and there have been a several exceptional items. 

However, JLR put up an unexpectedly strong show during the quarter. JLR's operating margin came in at 16.2% in the March quarter against 14.4% it reported in the December quarter.

Analysts claim that the margins have rebounded due to the positive operating leverage and improving demand in China helped. JLR's profit after tax jumped 56% to £472 million during the March quarter. Revenues for the quarter rose 13.5% year on year to to £6,594 million.

“We are investing £3.8 billion this year in new capacity addition, product development and meeting other engineering costs as far as JLR is concerned,” said Ralph Speth, CEO, JLR.  The standalone business too reported healthy growth. Revenues grew by 17% y-o-y to Rs 12,569 crore. 

Sales growth was driven by a 26.6% y-o-y spurt in volumes of medium and heavy commercial vehicles during the quarter on the back of the continued replacement demand, initial fleet expansion demand, infrastructure spending and better profitability of the freight operators. 

Light commercial vehicles also reported a volume growth of 11.8% y-o-y during the quarter. The standalone business EBITDA margin stood at 8.1% against estimates of 6.7%. Margins in the domestic business expanded as raw material costs declined 400 basis points sequentially. The operating income of the standalone business came in at Rs 1,021 crore, which again is well ahead of estimates.