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Tata Motors: Tianjin hits profits - Views on News from Equitymaster
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Tata Motors: Tianjin hits profits
Dec 18, 2015

Tata Motors has announced its results for the second quarter ended September 2015 recently. Revenues grow by 1% YoY, while the company reports a net loss of Rs 4.4 bn on a consolidated basis. Here is our analysis of the results.

Performance summary

  • Net sales grow by 1% YoY on a consolidated basis largely led by the India business.
  • Operating margins contract by 4.6% to 11.2% YoY during the quarter on account of the substantial rise in other expenditure and staff costs (as percentage of sales).
  • Barring the extraordinary loss of Rs 26.5 bn, net profits fall by 32% YoY, more or less in tandem with the fall in operating profits.

Financial snapshot

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 606,408 613,182 1.1% 1,251,693 1,226,203 -2.0%
Expenditure 510,719 544,379 6.6% 1,044,541 1,066,312 2.1%
Operating profit (EBDITA) 95,689 68,804 -28.1% 207,152 159,891 -22.8%
EBDITA margin (%) 15.8% 11.2%   16.5% 13.0%  
Other income 2,184 2,462 12.7% 4,316 5,525 28.0%
Finance costs 9,296 11,694 25.8% 18,750 22,767 21.4%
Depreciation 32,134 44,279 37.8% 61,930 82,512 33.2%
Exceptional items 265 (26,529)   1,204 (27,696)  
Profit before tax 56,708 (11,236)   131,992 32,441 -75.4%
Tax 23,639 (7,036)   44,790 8,667 -80.6%
Profit after tax/(loss) 33,069 (4,201)   87,202 23,774 -72.7%
Share of profits of associates 35 39 13.3% 83 89 7.6%
Minority interest (194) (226)   (394) (472)  
Net profit after taxes 32,910 (4,388)   86,891 23,392 -73.1%
Net profit margin (%) 5.4% -0.7%   6.9% 1.9%  
No. of shares (m)         3,395.9  
Diluted earnings per share (Rs)*         31.5  
Price to earnings ratio (x)*         12.0  

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

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