Mumbai - Tata Motors, India’s biggest carmaker, posted profit that missed analyst estimates as demand for Jaguar Land Rover vehicles in China waned.
Net income slumped 56 percent to 17.2 billion rupees (R3.2bn) in the quarter to March, from 39.2bn rupees a year earlier, the Mumbai-based company said. That trailed the 40.6bn-rupee median of 24 analysts’ estimates compiled by Bloomberg. Profit at the Jaguar Land Rover unit fell 33 percent to £302 million (R5.5bn).
Jaguar Land Rover retail sales volume declined in the quarter from a year earlier, dragged down by a drop in demand for luxury vehicles in China. Earnings were also hurt by a prolonged slump in sales of its light commercial vehicles in India, Tata’s home market.
“Pricing and margin pressures are likely to continue for a few more quarters,” Chokkalingam G, the managing director at Mumbai-based Equinomics Research, said. “We will watch out for volume growth and margin improvement in Jaguar Land Rover.”
Tata revenue rose 3.5 percent in the quarter to 675.8bn rupees. Sales at the luxury unit increased 8.9 percent to £5.83bn.
Shares of the carmaker dropped 1.5 percent to 497.60 rupees at the close in Mumbai trading, before the earnings announcement. Losses at Tata, excluding units, widened to 11.6bn rupees, from 8.2bn rupees a year earlier.
Tata said it would not pay a dividend for the year because of the “continued weak operating environment in the standalone business.
Bloomberg