Tata Motors profit doubles in 2nd qtr

Tata Motors profit doubles in 2nd qtr

Tata Motors, however, explained that its profit before tax (PBT) for the  quarter was after considering notional foreign exchange loss (net) of Rs 245.23 crores. “Had the exchange differences for the quarter ended September 30, 2008, been accounted for as per the current policy, the increase in PBT would be 50 per cent instead of 153 per cent,” it said.

The company’s revenues (net of excise) during the quarter stood at Rs 7,978.82 crore as compared to Rs 7,078.85 crore in the September quarter last fiscal, up 12.7 per cent. 

However, the earnings don’t include the Jaguar Land Rover luxury unit, which Tata Motors bought last year for which it had to obtain a bridge loan of $ 3 billion. Apart from the volume recovery — as exemplified by truck sales and the introduction of the world’s cheapest car ‘Nano’ during the second quarter —  the company ascribed the rise in profits to improved realisations as well as stable material prices and accelerated cost reduction efforts, said Tata Motors MD Prakash Telang.

Tatas sold 89,655 commercial vehicles and 60,917 passenger vehicles during the quarter. Meanwhile, the company announced that it is in the process of successfully paying down the entire debt of $ 3 billion obtained for the purchase of two luxury brands Jaguary and Land Rover last year.

Giving a break-up of funds raised to pay down the debt of JLR buy, the company said it had raised Rs 4,200 crore through rights issues, another Rs 4,200 crore through bonds, Rs 1,700 crore through various divestments and $ 750 million through GDR. 

In effect, Tata Motor’s Vice Chairman Ravi Kant said: “in the next two-three days, the company would be free of this debt and its revised debt-equity ratio will be 1.34.”