Tata Motors Q3 net up 12%: Video

Higher sales helped Tata Motors post an 11.50 per cent increase in its net profit, which stood at Rs 513.17 crore for the quarter ended December 2006, against Rs 460.23 crore a year ago.

Income from operations grew 37.08 per cent to Rs 6,956.84 crore, against Rs 5,074.86 crore last year. This includes a foreign exchange gain of Rs 131.61 crore, against a loss of Rs 43.27 crore included in other expenditure for the year-ago quarter.

"Tata Motors is a global company and is exposed to all types of foreign exchange risks. Foreign exchange gains or losses should be treated as an integral part of operations," said Praveen P Kadle, executive director (finance), adding the company's annual foreign exchange exposure could be Rs 4,500 crore.

Tata Motors Managing Director Ravi Kant said the company was planning various initiatives to lower risk possibilities on the foreign exchange front.

Operating profit increased 53 per cent to Rs 952.21 crore, against Rs 622.05 crore last year. Sales, including exports, went up by 27.51 per cent to 1,41,827 units for the quarter, against 1,11,228 units for the corresponding quarter last year. Vehicle production grew 24.30 per cent to 1,39,733 units for the quarter, against 1,12,412 units last year.

"The performance of the company is ahead of expectations as the EBITDA margins has improved while costs are coming under control. With its overseas manufacturing plans, the company will have an edge on exports too," Ashutosh Goel, an auto analyst with Edelwiess.

Commenting on the small car project, Kant said the design has been finalised and the prototypes are being tested.

"Over 60 to 70 vendors for the project have been finalised while the construction of site at Singur (West Bengal) has started. We are sticking to the 2008 deadline to rollout the project," Kant said.

He confirmed that Italian automotive major FIAT has also informed that they were willing to associate for this ambitious small car project.