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Tata Motors: A Profitable Fourth Quarter - Views on News from Equitymaster
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Tata Motors: A Profitable Fourth Quarter
Jul 8, 2016

Tata Motors has announced its results for the fourth quarter ended March 2016 recently. Revenues grow by 19% YoY, while net profits trebled on a consolidated basis. Here is our analysis of the results.

Performance summary
  • Net sales grow by 19% YoY on a consolidated basis led by both the India business and Jaguar Land Rover (JLR).
  • Operating margins expand by 1.7% to 14.1% during the quarter on account of the fall in raw material costs (as percentage of sales).
  • Barring the extraordinary items during both the periods, net profits grow by 143.5% YoY, led by the healthy growth in operating profits and reduction in interest costs.

    Consolidated financial snapshot
    (Rs m) 4QFY15 4QFY16 Change FY15 FY16 Change
    Net sales 677,777 806,844 19.0% 2,631,590 2,755,611 4.7%
    Expenditure 593,394 692,972 16.8% 2,239,203 2,388,049 6.6%
    Operating profit (EBDITA) 84,383 113,872 34.9% 392,386 367,562 -6.3%
    EBDITA margin (%) 12.4% 14.1% 14.9% 13.3%
    Other income 2,452 2,486 1.4% 8,987 9,817 9.2%
    Finance costs 18,946 12,552 -33.7% 48,615 46,234 -4.9%
    Depreciation 38,568 44,239 14.7% 133,886 170,142 27.1%
    Exceptional items -1,612 6,044 -1,847 -21,196
    Profit before tax 27,710 65,611 136.8% 217,026 139,809 -35.6%
    Tax 10,236 13,546 32.3% 76,429 28,726 -62.4%
    Profit after tax/(loss) 17,474 52,064 197.9% 140,596 111,083 -21.0%
    Share of profits of associates 30 89 201.4% 134 213 59.0%
    Minority interest -339 -383 -868 -1,059
    Net profit after taxes 17,165 51,771 201.6% 139,863 110,237 -21.2%
    Net profit margin (%) 2.5% 6.4% 5.3% 4.0%
    No. of shares (m) 3,395.9
    Diluted earnings per share (Rs)* 38.7
    Price to earnings ratio (x)* 12.0

    (* On a trailing 12-month basis, adjusted for extraordinary items)

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