Tata Motors Earns $432 Million - Analyst Blog

Tata Motors Ltd. (TTM) posted a profit of Rs.19.9 billion ($432 million) during the first quarter of its fiscal year, ended June 30, 2010. That was in sharp contrast to a loss of Rs.3.3 billion ($71 million) in the prior-year quarter. This is equivalent to earnings per share of Rs.34.80 (76 cents) during the quarter against a loss of Rs.6.40 (14 cents) a year ago.

Sales volume for the quarter surged 49% to 190,304 vehicles globally. Consequently, revenues soared 64% to Rs.270.6 billion ($5.9 billion).

Jaguar and Land Rover (JLR) – acquired by Tata from Ford Motor Co. (F) in 2008 – showed a profit before tax of Rs.15.9 billion ($345 million). This was due to an increase in sales volumes, massive restructuring programs after its acquisition and favorable currency translation effects.

In the quarter, wholesale volumes of JLR increased to 57,153 units from 35,947 units in the first quarter of prior fiscal year. Retail sales volumes of JLR improved on the back of higher demand for its products, including the newly launched XJ.

Tata's Daewoo Commercial Vehicles division reported a 20.9% rise in sales during the quarter. Tata Motors Finance Limited – the company's captive financing subsidiary – showed a profit of Rs.235 million ($5 million) through an improved performance of NPA.

Tata Motors is an Indian auto giant, which designs, develops, manufactures and sells a range of automotive vehicles. It offers passenger cars, light commercial vehicles, engines for industrial and marine applications; construction equipment as well as provides engineering solutions and software consultancy and services.

Furthermore, Tata engages in automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling, plastic and electronic components for automotive and computer applications and automotive retailing and service operations.

The company also provides financing for its vehicles. Its products are marketed in Africa, Australia, Europe, Middle East, Southeast Asia and south Asia. The company is a Zacks #4 Rank ('Sell') in the short term (1–3 months) and an "Underperform" in the long term (6+ months).

 
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