TATA Motors posted its first drop in profit in five quarters yesterday after its Jaguar Land Rover (JLR) business faced higher spending and a drop in operating margin following 18 months of soaring profit.
Rising investment costs and falling profitability at the carmaker, whose profits have propped up its weaker parent for the past year and a half, combined with a drop into the red for the Indian company’s domestic business.
JLR said operating margin was 14 per cent in the December quarter, down from 17 per cent a year ago, also due in part to a shift towards less profitable models.
Total sales at JLR rose to £3.8bn but profit fell to £296m, down 25 per cent from a year earlier when it was £393m.
In China, the world’s biggest auto market, JLR sales jumped 71 per cent in 2012, making it the marque’s second-largest market after Europe. Tata’s net profit for the third quarter of the financial year ending
31 March came in far below market estimates at 16.28bn rupees (£193.8m), down 52 per cent on the year and the first fall since the three months to September 2011.
JLR had net cash of £437m at the end of September, it said yesterday.
City A.M. Reporter