Tata Motors, the country’s third-largest passenger car maker and the largest commercial vehicle manufacturer, reported a 30.13 per cent a dip in net profit to Rs 326 crore in the June quarter due to forex losses on its long-term loans and increase in the cost of raw materials.
Managing Director Ravi Kant said, “The pressure from input price increase has become enormous. The year will be the most challenging one for the auto industry. We have not shied away from price increases earlier and the process will continue.”
The company made a notional valuation loss of Rs 199.88 crore (compared to a gain of Rs 205.89 crore in the corresponding quarter last year) due to the volatility in foreign exchange rates impacting the company’s long-term funds raised through foreign currency convertible instruments.
Overall sales grew almost 8 per cent during the quarter pushing its net sales revenue more than 14.4 per cent to Rs 6,928.44 crore as against Rs 6,056.82 crore in the corresponding period last year.
During the same quarter, the company booked other income of Rs 113.66 crore by selling 24 per cent in the auto component making subsidiary - Tata AutoComp Systems (TACO) - for Rs 113.66 crore.
Even in this challenging environment, Tata Motors has decided to go ahead with its planned launches in passenger and commercial vehicles. The company also said it will increase efficiency through better logistics and aggressive cost reduction techniques.
“External forces will always be there. The question is what we can do. We are currently putting emphasis on the launches of new products. We will be launching 12-15 new products in the commercial vehicle (CV) space by the year-end,” Kant said.
