Tata said the JLR business is witnessing “some stability” in key markets.
Tata Motors has reported a consolidated operating profit for the quarter ending September 30, 2009 of 218 million rupees ($4.7 million).
India’s largest auto company saw a revival in its home market and improvements at its Jaguar Land Rover subsidiary.
The turnaround, from a loss of 9.42 billion rupees in the same July-to-September period last year, was good news for the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer.
Tata earnings had been hit hard after its takeover of JLR from Ford Motor Company in June of last year just before the ongoing global Great Recession took hold. Analysts had feared that the buy would hurt the company for years to come, a prospect that remains.
Tata said the highlight of the quarter was that the JLR business posted an operating profit of £41.29 million (Rs. 325.27 crores), supported by a 23% growth of wholesale volumes compared to the previous quarter, as well as aggressive cost reduction efforts.
Tata said the JLR business is witnessing “some stability” in the external environment with certain key markets showing signs of recovery. The new products launched by the business in the current year, the upgraded Range Rover, Range Rover Sport and Discovery 4, continue to receive “strong market reception.”
Tata Daewoo, the company’s subsidiary in South Korea, launched the Prima premium truck in September. The construction equipment subsidiary, Telcon, launched two indigenous excavators and is poised to benefit from increased infrastructure activities in the coming quarters. The other key subsidiaries of the company have also begun to see visible improvement in demand during the quarter, according to Tata.
Still, the company’s year-over-year returns for the six months of its fiscal year show only a tiny rise in revenues from 374.8 billion rupees to 375.0 billion rupees as operating income returned to profitability of 3.17 billion rupees, down by around 85%.
The company also remains highly leveraged with a debt-to-equity ration of 4:1. Debts at JLR are 90 billion rupees ($1.9 billion), and Tata Motors’ debt at Sept. 30 stood at 210 billion rupees or more than $4.4 billion.