Tata Motors Ltd. (TTM) announced a 17% rise in earnings per share to INR7.04 (13 cents) in its first quarter of fiscal 2013 ended June 30, 2012 compared to INR6.02 in the corresponding quarter last year. In absolute terms, profits increased 12% to INR22.45 billion ($411.7 million) compared with INR19.99 billion in the year-ago quarter.
Revenues in the quarter grew 30.1% to INR433.2 billion ($7.95 billion). The improvement in revenues was attributable to an increase in volumes of new products and favorable market mix of Jaguar Land Rover (JLR).
Revenues from Tata Motors standalone declined 8.9% to INR105.9 billion ($1.94 billion). The decrease in revenues was due to weak economic condition along with increase in excise duty and poor availability of freight. Volume sales of Tata Motors including exports declined 3.6% to 190,483 units in the quarter. Commercial vehicle sales in domestic market went up 1.3% to 114,710 units. However, passenger vehicle sales including Fiat, Jaguar and Land Rover vehicles dropped 9.9% to 62,619 units.
Price competition in the commercial and passenger vehicle business had adverse effects on volumes sales and operating margin. Thus operating margin slashed to 7.3% in the quarter compared to 8.8% in the corresponding period last year. Operating Profit (EBITDA) was INR7.74 billion ($141.95 million) compared to INR1.02 billion in the corresponding quarter of last year.
Total Jaguar Land Rover sales for the quarter went up 34.4% to 83,452 units, including 11,774 units for Jaguar and 71,678 units for Land Rover. The year-over-year improvement in sales volume was attributable to higher sales of the new Range Rover Evoque and a 91% growth in demand in China.
In Europe, revenues from Jaguar Land Rover went up 34.6% to £3.64 million ($5.8 billion). Operating profit (EBITDA) was £527 million ($834.3 million) or 14.5% of sales, up 45.6% from £362 million or 13.4% in the corresponding quarter last year. The increase in revenues and operating income was due to higher demand for new products, improved market mix and favorable exchange rate environment.
Revenues from Tata Motors Finance Ltd. were INR6.2 billion ($11.43 million). Meanwhile, revenues from Tata Daewoo Commercial Vehicles Co. Ltd. were KRW217 billion ($188.79 million) during the quarter.
Tata Motors is a global automaker that is placed among the top automotive companies in India. The major competitors of the company are Ford Motor Co. F) and General Motors Company (GM).
The company produces passenger cars, trucks, vans and coaches. It is spread over several countries in Europe, Africa, the Middle East, South Asia, South East Asia and South America. Currently, it retains a Zacks #5 Rank, which translates into a short-term (1 to 3 months) Strong Sell rating.