Tata Motors' net declines 15% at Rs 1,880 crore on rising input costs

MUMBAI: Tata Motors, the country's largest automotive company, posted a 15% decline in net profit at Rs 1,880 crore due to costlier inputs and losses linked to the depreciation of the rupee.

The firm's profits lagged the median of 2,090 crore estimated by 26 analysts compiled by Bloomberg. Sales rose 27% to Rs 35,938 crore while the cost of inputs such as steel, aluminium and rubber went up by 30% to Rs 22,100 crore, the company said in a press statement. The depreciation of the rupee resulted in a revaluation of foreign currency, borrowings, deposits and loans leading to a cumulative impact of 439 crore.

The consolidated EBIDTA margins have fallen by 140 basis points from 14.7% to 13.4% for the quarter for Tata Motors mainly on account of rising raw material prices. "The company margins during July-September quarter were hit by lower volumes, higher marketing spends and increasing input costs for the car business," said C Ramakrishnan, CFO, Tata Motors at a press conference.

Tata Motors's passenger vehicle sales in India fell 22% in the last quarter. "The domestic passenger vehicle sales were impacted by rising interest rates, fuel price hikes, inflationary pressures and intense competition," the company said.

It said it feared that these factors could imperil truck sales - which so far have been growing at a decent pace - in the future. "Interest rate increases frequently in the past, fuel price escalation and overall expectation of lower industrial growth and slowdown in the economy, all these may impact commercial vehicle demand," said Ramakrishnan.