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Old 16th February 2012, 04:41   #16
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Originally Posted by tsk1979 View Post
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.
Yep have to agree, the surprise is that this is despite a 33% rise in sales!!

They have blamed raw material price rise which they absorbed so far (similar reason given by M&M after they too showed a dip). Which also explains the price hike this month by Tata.

Its a tough balance: sales vs profit!!
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Old 16th February 2012, 09:43   #17
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

For those wondering about why an increase in sales has led to a dip in profits (domestic operations), remember that Tata Motors indulged in heavy discounting in the Oct - Dec period.
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Old 16th February 2012, 10:11   #18
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Severe discounts on the likes of Aria,Safari,Grande and even the likes of Manza must have lead to the drop in profits for sure.

I am not very sure but since Tata must be paying royalty to Fiat for using their technology in Manza and Vista, the profit margin should eventually be low for every Vista/Manza they sell.

Remember Vista/Manza are top sellers for Tata
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Old 16th February 2012, 14:25   #19
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

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.

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%.

On a very high-level look at these numbers, TML seems to be on the right track even if they have lost numbers and margins in the domestic market.

The average price of a JLR product is about 8-10 times the price of a domestic (passenger car) product. Consider the difference in margins, and that gap becomes substantially higher because the margins in the domestic market are wafer-thin. Wafer-thin margins are fine if you have significantly large volumes, but in this case the volume seems to be lower than that of the high-volume, big-ticket products. A 50% increase (which in itself is impossible) in domestic sales and revenues isnt going to make an impact on the group numbers.

So even if they lose about 5% in market share on the domestic passenger car front, that isnt really catastrophic as long as the high-margin units on the JLR side are actually higher. It also gives them the time (and the $$$) to plan out a proper domestic strategy instead of the really bad knee-jerk responses to market forces like the Sumo Grande and the alleged Safari Merlin.

If you have to go out and acquire, you should acquire a game-changer and not merely augment or supplement whatever you already have. I think they've done that.
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Old 16th February 2012, 15:12   #20
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

A related article on Tata's performance- The title of the article sums up their performance-

Tata Motors profits are a one-vehicle wonder: Evoque, not Nano | Firstpost
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Old 16th February 2012, 16:49   #21
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Tata might list JLR separately.

15Feb12 -BREAKINGVIEWS-JLR flotation would make sense for Tata Motors
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

By Jeff Glekin
MUMBAI, Feb 15 (Reuters Breakingviews) - Jaguar Land Rover contributed 95 percent of the combined profits of the Tata Motors group last quarter. A minority listing of the UK firm would let the Indian parent book a healthy return on its $2.3 billion purchase, and allow JLR to raise cheap capital overseas. There's no need to keep this gem hidden.
Tata Motors should be rightly proud of the success it has achieved in reviving JLR's fortunes. The firm delighted the market with better than expected results in the third quarter ending December 2011, sending its shares up almost 13 percent in two days.
The chief executive of Tata Motors stepped down in September last year. No replacement has yet been found. That suggests there's no rush to bring in a leader for the group as a whole, and that the two firms, the domestic business and JLR, can run happily as separate concerns. Rather than try to integrate and search for synergies, Tata could split JLR out completely and sell a minority of its shares in an initial public offering.
A flotation would bring Tata cash, which it could use to pay down some of its $4 billion debt. And a listed JLR would find credit cheaper if more debt were needed to fund investments. Alternatively, it would presumably have more highly valued shares than its parent -- helpful if acquisition opportunities come along.
Tata's domestic motor operations would also stand to benefit from stripping out JLR. Management could focus on increasing market share in India. It currently trails the likes of Maruti Suzuki and faces stiff competition from foreign players keen to grab a slice of one of the world's fastest growing markets.
And even with a foreign stock market listing, JLR need not cut its Indian ties. It could still increase both sales and production there. Tata would remain the majority owner, after all. Corporate patriarch Ratan Tata was reported to have considered a listing in 2011 until the IPO market faltered. Stock market conditions remain a constraint, but as and when investor appetite returns, a listing for the British business makes sense.

-- India's Tata Motors reported a stronger than expected 40.5 percent rise in quarterly profit as robust sales at Jaguar Land Rover made up for weakness in its home market, sending up its stock to its highest level in more than a year, Reuters reported on Feb. 14. Tata Motors has a market capitalisation of $18.6 billion.
-- Tata Motors said consolidated net profit rose to $642 million in the three months to Dec. 31 up from $457 million the previous year. Net profit in the company's India business dropped by more than half to $33 million, partly as a result of higher commodity costs and increased spending on marketing. Profit margins at JLR were 20.1 percent, compared with 6.7 percent in the domestic business. Tata, which also makes the ultra-cheap Nano, bought Jaguar Land Rover in 2008 from Ford for $2.3 billion.

Source: Reuters

Last edited by arvindmanju : 16th February 2012 at 16:50.
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Old 16th February 2012, 18:07   #22
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Default Re: Tata Motors 3rd Quarter FY12 Results - $692 Million Profit (Up 41%)

Firstly I would like to start with the Disclaimer : I have nothing against TATA.

The way this company has nurtured from selling TATA 207 into TATA ARIA is not something any company can be proud of considering the fact that TATA has good amount of experience and deep pockets to hire the right person for the right job.

In 1992 ~ 1998 When company was Marketing and Selling Tata Sierra and Tata Estate , the kind of engineering precision in terms of fit/finish that went into the product could be forgiven given the fact that its a new entrant in the market and it needs a learning curve but its hard to digest the fact that after having Tata Sierra , Estate , Safari - 1234, Indica 12345 etc and even well designed product (interms of appearance which is a priority criteria in our market) for its time like Tata Xenon , Aria , Tata Indica , Tata Safari , Tata Aria never captured to market like it should have apart from TATA Indica which is a Taxi super hit.

Every time or rather most of the times there is a reason which explains its non acceptance in market like
1. Flawed Marketing.
2. Over ambitious pricing.
3. Product Engineering.
4. Below par customer service level.

At the time of launch of Tata Sierra and Estate, it made giant leaps as a product for the time but the same cannot be said about their launches post 2K.

In addition to this I feel a huge amount of Effort when into 1-Lac car which finally became a 1.6 Lac car. Again reasons are many but the fact is the car did not make an impact in terms of contributing to the brand in terms of Sales or Profits.

Now its nearly 25 Years since they started into Passenger segment taking into consideration Launch of 207 in 88'.

In 25 Years Hyundai was in a much better position in terms of product engineering and they were ready to attack mature markets.

Compare TATA to Mahindra / TVS / Bajaj and you realise that Tata is lagging back as an Automotive Brand.

Its high time to get back to the market with a bang with right amout of effort and time put in the right product to make maximum Bang with added bucks.

Disclaimer : Again my knowledge is limited and its not a personal attack against the brand. Its just my opinion and may not necessarily reflect the fact.
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