Tata Motors net up 19% at Rs 526 cr

The country's top vehicle maker Tata Motors on Wednesday announced a 19 per cent rise in net profit at Rs 526.84 crore for the September quarter, helped by cost-cutting measures and foreign exchange gains.

Profit in the corresponding previous quarter was Rs 441.72 crore. While high interest rates and pressure on liquidity restricted sales, the company managed to cut costs on raw material by as much as Rs 118 crore and other expenses by Rs 62 crore which boost its bottomline.

Net sales (post excise duty) were up marginally by 1.33 per cent at Rs 6,672.65 crore as compared with Rs 6,585.20 in the previous corresponding period.

Managing Director Ravi Kant said, "Substantial rise in raw material prices like steel and other input costs impacted margins. We have increased our commercial vehicle prices by 2.5 per cent during the quarter, inspite of this there is a pressure."

Rupee appreciation also hurt margins. With South Africa, its single largest export market, trading is dollar denominated. "Realisations have been under pressure substantially from that country throughout the year," Kant said.

The company expects things to get better in the second half when it plans to introduce newer vehicles in the commercial and passenger vehicle space.

"We don't see much change in the external environment. Whatever change is going to come, as far as Tata Motors is concerned, will be internal action," Kant said.

Small car in Sept-Oct

The small car from Tata Motors will go into commercial production by the middle of the next financial year, the company said on Wednesday. The company hopes to unveil the new car at the AutoExpo 2008.

"There has been a lot of pressure on the rising material prices front, but we should be able to go under commercial production (for the small car) by the middle of financial year 2008," said Managing Director Ravi Kant.

The small car project has been delayed due to land acquisition and heavy monsoon which affected progress of work.

Earlier, the company had mentioned it would bring out the new car in June-July 2008. Now, the launch should be sometime in September-October next year.

The Tata Motors boss however refused to say anything on the ex-factory price of the vehicle.