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Old 14th February 2012, 19:40   #1
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Default Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Some executives in Detroit would definitely be kicking themselves!


Tata Motors Oct-Dec Net Soars On Higher Vehicle Sales

Quote:

-- Net profit rises to INR34.06 billion from INR24.24 billion

-- Jaguar Land Rover net profit rises 57% to GBP440 million

-- Shares gain as much as 5.5% after earnings announcement, close 3.7% up

(Adds October-December truck, bus sales in 10th paragraph, comments from executive in 11th-12th paragraphs.)

By Anirban Chowdhury and Nikhil Gulati

Of DOW JONES NEWSWIRES

MUMBAI (Dow Jones)--Tata Motors Ltd. (500570.BY) Tuesday beat market estimates with a 41% rise in quarterly consolidated net profit, helped by robust sales at its U.K.-based Jaguar Land Rover unit and strong vehicle demand in its home market.

India's biggest auto maker by revenue posted a net profit of INR34.06 billion ($689.92 million) in the three months ended Dec. 31, compared with INR24.24 billion a year earlier. Nine analysts on average had expected a consolidated net profit of INR26.15 billion.

Sales rose 44% to INR452.60 billion from INR314.42 billion.

Shares of Tata Motors climbed as much as 5.5% on the Bombay Stock Exchange after the earnings announcement. They later pared some gains and closed 3.7% up at INR267.90, outpacing a 0.4% rise in the broader index.

New model introductions has aided a steady growth in demand of Jaguar Land Rover vehicles, especially that of the recently introduced compact sport-utility vehicle Evoque. Its focus on emerging markets such as China, Russia and India has also helped boost sales.

Tata Motors bought the financially beleaguered Jaguar Land Rover brands from Ford Motor Co. in 2008 for $2.3 billion. The luxury brands are now the biggest contributor to Tata Motors' sales and profit.

Net profit at Jaguar Land Rover soared 57% in the October-December period to GBP440 million, while sales surged 41% to GBP3.75 billion.

Sales of Jaguar Land Rover vehicles rose 37% to 86,322 autos, aided mainly by robust demand for the Evoque SUV. Tata Motors said it sold 32,000 units of Evoque until December.

"As expected, Jaguar Land Rover volumes are driving Tata Motors' net profit and we expect this trend to continue," said Surjit Arora, an analyst at brokerage Prabhudas Lilladhar Pvt. Ltd. "But the fact that the unit accounts for 78% of the company's profit makes it prone to foreign-exchange losses now and going forward."

In India, the company managed to stay immune from a slump in car sales that has affected profit levels of several rivals. Car and SUV sales grew 33% to 85,963 units in the past quarter, when it also sold 131,220 trucks and buses, up 15.5%.

P.M. Telang, managing director of India operations, told reporters it expects vehicle sales to improve in coming months. "We expect to sell 10,000 units a month of the Nano minicar in the next two-three months."

It posted a 16% earnings margin before interest, tax, depreciation and amortization in the past quarter.
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Old 14th February 2012, 20:58   #2
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

I too bought a Vista in December, which means I kind of aided Tata motors to reach to this profit level.

Nevertheless really happy to see how Tata Motors turned around Jaguar and Land Rover.
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Old 14th February 2012, 22:10   #3
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

In the last fiscal JLR's net income was more than a billion pounds. This along with the latest results seem to easily cover the money Tata spent in acquiring it from Ford. Today JLR's net income alone is more than Maruti and Mahindra's put together !! Their cars especially Land and Range Rovers have among the fattest margins in the Auto industry.

Tata has made a late surge in the domestic market as well and regained the no.2 spot. With the Nano sales picking up, imminent release of the Storme and new models on the Indica platforms things are looking up for the Indian company!!
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Old 14th February 2012, 22:25   #4
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Close to USD590 million contribution through JLR!!!

Great news for the for british marca... but at the same time, only USD105 million for the parent company. :shocked
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Old 14th February 2012, 22:28   #5
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

On the global business scene, Those who criticized Tata's gamble/decision to acquire JLR especially after Oct 2008 financial crisis happening after Tata's formal aquiring in March 2008 will find Tata great now.


As for domestic Indian market, Tata motors's profit looks good & fat due to conversion of UK pounds to rupees. The domestic cars like Aria, Grande are pure sales duds/disasters for the company due to high price, bad features respectively and precisely due to Tata motors not giving what these customer wanted on them collectively.

Nano for its price and initial hype did not do well. Bad media on nano fire also a reason.

Tata motors's Domestic indian products needs better QC, good quality fit and finish. The prices of all Tata SUVs, vista, indica ev2 has steeply gone up in the past 1 year making Tata loosing their VFM badge.


Anyways Tata motors is wealthy and cash rich now. If focus is brought into each of its domestic indian cars Tata can achieve a lot. Good luck to Tata Motors.

Last edited by harimakesh : 14th February 2012 at 22:30.
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Old 15th February 2012, 11:45   #6
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Brilliant Q3 results from Tata Motors. A well deserved pat on the back. Not only internationally, but also within our country Jaguar & Land-Rover is doing pretty well considering the limited dealer network reach.

What TML now needs to work on is on their domestic portfolio which is not performing upto the mark.

It desperately needs to launch new models - (and not mere refreshes & nose/tail jobs) maybe on existing or even older platforms - keeping costs in check.
If FORD can do a FIGO (which is essentially a thorough re-skinning of the 2003-2004 UK Ford Fiesta, platform is the same), if GM-CHEVY can do a SAIL (which they displayed at the Del Auto Expo) which is essentially a reskinned version based on the Opel Corsa platform which ran on our roads 10 years back, TML should also look at something to this effect.

The old Indica platform is quite a solid piece of engineering - it spun off many variants such as the : Indigo, Indigo Marina, Indigo CS, Indigo XL etc, etc. Am sure TML with its ingenuity and engineering skills can derive a sub-4metre SUV from it ? Or a sub 4-metre MPV (more tuned to car owner's tastes and ergonomics) and not like the VENTURE (which is essentially ACE derived). What about a sub-4metre notch ?
I'm sure the Tata Motors engineers are attuned to changing market trends and hopefully working on such stuff.
It definitely makes us feel proud and happy that an Indian company had the guts and gumption to acquire and make a spectacular success out of a debt ridden, beleagured JLR that was almost consigned to the grave by Western auto manufacturers .

It will make us even prouder if Tata Motors achieves the top carmaker slot in the domestic market.
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Old 15th February 2012, 12:16   #7
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

So Tata can make people happy if not with cars, they can make people laugh who will buy there shares Kudos to Tata.

Just wonder one thing, why Tata is not making use of the JLR with their cars? Like they could have taken there expertise for cars like Aria. JLR cars are so good looking, highly technically advanced, very good in quality & fit, finish. They should have made Aria look like Rover, it would have sold much more IMHO. Aria lacks badly in looks department.
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Old 15th February 2012, 14:53   #8
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

This is showing good business acumen by Tata, bought a struggling JLR and now have completely turned it around for others to see an imitate. Guys at Ford US must be scratching their heads as to what part of the puzzle they missed solving.

Tata, please show equally good business acumen for cars sold in India and give your fans and customers good VFM. Safari Storm being one prime example to showcase in near future. Bring in JLR for premium positioning.
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Old 15th February 2012, 15:02   #9
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

TATA - India performance figure includes its subsidiary too isnt it? I think they need to focus more on the domestic market.

Anyway good to see the performance of JLR, kudos to TATA!
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Old 15th February 2012, 16:22   #10
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Great show by JLR; Tata's decision in buying the iconic brands is vindicated again & again. However, there's clearly a lot of work to be done on the domestic front. Take JLR earnings out and it's not an encouraging picture.

Ford's last quarter operating profit was 1.1 Billion and, importantly, it lost over 100 million in its European operations. If Ford could have turned around JLR the way they did, their operating profit would have been nearly double that, and it's European operations would be profitable.

However, I deeply respect Alan Mulally and his decision to get rid of all the "baggage" brands. In his words, every minute spent on Jaguar / Volvo is a minute less on Ford. Ford would have definitely gone down under (heck, they mortgaged the brand name!!), and it's only because of Mulally's leadership that Ford is a healthy, profitable company today.

If you are into reading, check my latest recommendation in this thread.
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Old 15th February 2012, 22:39   #11
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

JLR owes a Ford a lot for their present success and to some extent BMW. The XF and XJ projects were completed under Ford and even today all JLR products utilize the blue oval's powertrains. The Range Rover, Sport and Discovery was developed under BMW and are still going very strong.

But Tata have been far more successful in managing JLR than any of its previous owners wether they were British, Germans or Americans. Also JLR's first model developed under Tata - the Evoque has been a sales triumph so far!!

JLR has a very exciting future to look forward to. A slew of new models incl. next gen. Range Rovers on aluminum platform (possible Geneva launch next month!!), a supercar with Williams, the 2 seater sports coupe, Jag exec. saloon (3 series rival), next gen Defender to be made in India etc... Also include the upcoming engine plant (presently they face huge supply constraints especially due to Evoque's demand), new factory in China.... Looks like JLR is going to earn Tata a lot more dosh in the coming years.
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Old 15th February 2012, 23:33   #12
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Sorry if this is a bit off topic and silly
JLR profit is GBP 440 million if converted to USD at current rate of 1.5709 (source Google finance) it comes out to be $691 million roughly 100% profit. What am I doing wrong!

Guys you know the feeling how you are able to solve toughest quantitative or interpretive calculations but are stuck on a silly thing which is obvious to everyone but not you!! Kill me now.
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Old 15th February 2012, 23:41   #13
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Well said GTO.

JLR was a great buy indeed. Its not everyday that one can buy an automobile company for a bargain which has great technology, brand, history and a great product line.

But Tata seems to be going off track here in India, even with the commercial vehicles as well. The more I see those orange Marcopolo AC buses here on roads, the more I cringe. They don't have any refinement what so ever and seems to struggle to move. And even the new buses are in a very bad shape.

Hope they can put all this money and access to technology to good use.
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Old 16th February 2012, 00:31   #14
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Quote:
Originally Posted by kaks15 View Post
Sorry if this is a bit off topic and silly
JLR profit is GBP 440 million if converted to USD at current rate of 1.5709 (source Google finance) it comes out to be $691 million roughly 100% profit. What am I doing wrong!

Guys you know the feeling how you are able to solve toughest quantitative or interpretive calculations but are stuck on a silly thing which is obvious to everyone but not you!! Kill me now.
In accounting, when 2 + 2 does not add up to 4, then "Exceptional Item" is generally the culprit. Large companies like Tata Motors will have loans and receivables in various currencies like dollars/GBP/Euros. And when its value changes with respect to rupees, you have "mark to market" forex gains or losses.

Anyway, the Indian unit closed the quarter with a net profit of Rs. 174 cr ($35 million) - down 58%.
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Old 16th February 2012, 01:14   #15
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Tata is sure in trouble. This number sure looks good, but 58% fall in profit in domestic market is not good. Tata has to get its act together at home.
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