JLR again to Tata Motors' rescue

Net sales at the consolidated level was Rs 63,536 cr, growth of 38.7% as against Rs 45,821 cr in the same quarter a year earlier

Exceptional income from the standalone business and continued strong performance by Jaguar Land Rover (JLR), its British-based arm, helped Tata Motors boost net profit and exceed analysts' estimates in the financial year's third quarter (October-December).

Consolidated net profit of the Mumbai-based company was Rs 4,805 crore, an increase of 195 per cent as compared to Rs 1,627 crore in the same quarter of 2012.

Net sales at the consolidated level was Rs 63,536 crore, growth of 38.7 per cent as against Rs 45,821 crore in the same quarter a year earlier.

The standalone Ebitda (earnings before interest, taxes, depreciation and amortisation) margins were negative at 4.3 per cent. Net sales were Rs 8,458 crore, a drop of 27 per cent as against Rs 11,584 crore in the same quarter last year. Net loss for the same quarter last year was Rs 458 crore.

Vehicle sales slumped sharply to 132,087 units, a fall of 36 per cent, as compared to 205,291 units earlier. Competition has eaten into their market share in the passenger vehicle segment, reducing it to only six per cent, its worst ever.

In the second quarter, the standalone operational loss was a record Rs 804 crore, a fourth straight loss.

Meanwhile, JLR remained unaffected and continued to post stellar growth, with doubling of profits in the three months. For the reporting quarter, the two brands reported £619 million (Rs 6,300 crore), as compared to £296 mn earlier (Rs 3,000 crore).

JLR had cash and financial deposits as of December 31 of £3.2 bn (Rs 32,600 crore) and undrawn long-term committed bank lines at £1.3 bn (Rs 13,200 crore). In December, JLR issued a new $700 million (Rs 4,300 crore) bond at 4.125 per cent, due in 2018. In January 2014, the company issued a new £400 mn (Rs 2,500 crore) bond at five per cent, due in 2022.

"Alongside the January bond issue, JLR made a tender offer for all of the £500-mn 8.125 per cent bonds due 2018 and all the $410-mn 7.75 per cent bonds due in 2018. Subject to market conditions, it is the intention to redeem the remainder of the above bonds on or before May 2014," the company stated.

At the standalone front, the company is banking on new model launches in both the passenger and commercial vehicle segments, to arrest the declining sales.