Tata Motors slips 5% on dismal Q3 results

Shares of Tata Motors are trading lower by 5% to Rs 561 on the BSE after India’s biggest automobile manufacturer missed estimates by a huge margin.

Net profit fell 25.5 per cent to Rs 3,581 crore from Rs 4,804 crore in the year-ago period. Bloomberg had estimated net profit at Rs 4,972 crore.

Unfavourable revaluations of foreign currency debt, unrealised hedges, higher depreciation and amortisation and a provision for capital cost of buildings at Singur, amounting to Rs 310 crore, also impacted margins and profits.

The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) margin fell to 15.4 per cent at a consolidated level from 16.6 per cent a year earlier. Except for costs of goods sold, all costs rose faster than the growth in sales, impacting margins. The profit before interest, tax, depreciation and other income stood at Rs 10,054 crore, against Rs 9,958 crore in the year-ago period.

At the standalone level, the company posted one of its biggest losses, of Rs 2,123 crore, against a profit of Rs 1,251 crore for the year-ago period (when it had received tax credit of Rs 630 crore).

Demand in the brand’s biggest market, China, grew the slowest in several quarters. JLR said one of its models was being phased out, while two others were replaced by new ones. JLR’s net profit disappointed, at £593 million (Rs 5,600 crore), a drop of four per cent from £619 million (Rs 5,800 crore) in the corresponding quarter of 2013.

The stock opened at Rs 580, touched a low of Rs 557 on the BSE. A total of 205,648  shares changed hands on the BSE so far.