“The operating performance in the quarter reflects overall higher wholesales, offset by an adverse foreign exchange impact of £207 million, including revaluation of £84 million”, Tata Motors said. Analysts, according to Reuters, had expected Tata Motors to post a profit of Rs 2,420 crore in the April-June period of fiscal 2017.
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C Ramakrishnan, chief financial officer, said the company can not predict whether the foreign exchange impact would continue, but added that it would be cautious and closely monitor and assess market conditions in Britain and the EU.
In a regulatory filing in BSE, the company said its total income for the first quarter increased to Rs 12,089.29 crore as against Rs 11,307.50 crore earned during the quarter ended June 30, 2015.
The majority of the forex loss was at its British luxury unit Jaguar Land Rover where profit after tax fell to 304 million pounds from 492 million pounds in the year ago quarter, despite a 9 percent increase in revenue thanks to strong sales of its Jaguar XE compact saloon and Discovery Sport SUV.
As per the company officials, all segments of the company witnessed growth during the quarter.
Tata Motors also pointed to lower local market incentives JLR’s business and higher depreciation and amortisation expenses as reasons for the decline in consolidated profit.
Revenue for the first quarter stood at 5,461 million pounds compared with 5,002 million pounds.
Jaguar Land Rover posted a profit after tax of £304 million compared with £492 million, down 38.21 per cent over previous year.
Professor David Bailey, an automotive industry expert at Aston University, said: “Clearly the company is having to invest heavily in new products and technology”.
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The net profit includes exceptional recoveries (insurance claim) of Rs.478 crore on account of last year’s Tianjin incident in China which had resulted in damage of 5800 JLR vehicles in the explosion. Land Rover retail sales during the quarter exceeded 1 lakh units for the first time, the company said in a separate note.
