Tata Motors net worth dips 16.5%

Confident about a truck segment turnaround

Homegrown auto major Tata Motors’ net worth declined 16.5 per cent during the last fiscal to Rs 56,300 crore according to the company’s annual report. The company’s net worth stood at Rs 65,600 crore in FY14.

“The decline in net worth was primarily led by hedging losses on unmatured derivative contracts of Rs 11,700 crore; of which, contracts having an MTM loss of Rs 4,800 crore mature in FY16 — these contracts primarily pertain to JLR. Translation losses of Rs 4,200 crore on foreign operations, foreign exchange losses of Rs 5,700 crore on long-term monetary liabilities charged through reserves, in line with option available in AS11 and actuarial losses of Rs 2,800 crore (due to change in assumption of discount rate) on JLR’s defined benefit pension scheme were charged through reserves as permitted by the IFRS,” Motilal Oswal said in a note.

According to the report, the capex for the current fiscal is going to be 37 per cent higher, as compared with the previous fiscal ended March 31, 2015. The company plans to invest Rs 38,800 crore in FY16 in new products and technologies, as against a capital expenditure of Rs 34,900 crore in FY14, and Rs 28,300 crore in FY15.

The company also sounded confident about a turnaround in the M&HCV truck segment in FY16. The management indicated that it expects M&HCV Truck segment in India to register a growth in FY16, driven by continuing trends toward the replacement of ageing fleet vehicles, and expectations of increase in demand from the infrastructure and industrial sectors due to government-initiated reforms.