Tata Motors Ltd. stock fell over seven percent after the company reported a 96 percent decline in profit for the third quarter of financial year 2017, after its subsidiary Jaguar Land Rover (JLR) reported a 5 percentage point contraction in margins.
The automobile manufacturer's consolidated revenue stood at Rs 67,484 crore during the quarter under review, down 4.36 per cent from Rs 70,567 crore during the like quarter of the previous fiscal.
Consolidated revenues for the company during the quarter degrew 4.37% to Rs 67,484 crore against Rs 70,567 crore for the corresponding quarter past year, the company said. However, income was up by 2.30% from Rs 66,999.69 crore of preceding quarter.
"The segment witnessed major pressure with a fall of nine per cent year-on-year" in sales, the company said.
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The biggest hit came from JLR, where net profit declined to £167 million ($208 million) from £440 million a year ago on a 13.1% increase in revenue to £6.5 billion. Light Commercial Vehicles (LCV) was overall flat, stated the company.
"Given this, JLR is in a more precarious position than its peers", IDFC Securities analyst Deepak Jain said in the report.
The company received payback worth 85 million pounds (over Rs 710 crore) from Chinese insurance companies for the Janjin blasts in 2015 which led to a loss of over 240 million pounds of inventory, Ramakrishnan said. The passenger vehicles segment grew by 25.4% YoY with the auto segment growth of 31.1% YoY on the back of continued strong response to the Tiago. Tata Motors ' loss after tax widened to Rs 1,046 crore in the third quarter of 2016-17, from Rs 137 crore a year ago.
"What is it that we need to be a high performance organization - being lean, it's about being agile and it's about having clearly addressed and delegated accountability", Guenter Butschek, MD and CEO of Tata Motors, told a news conference on Tuesday. Operating profit (EBITDA) for the quarter was £611 million (9.3% margin), compared to £834 million (14.4% margin) for Q3 FY2016.