Tata Motors has reported consolidated revenues, net of excise, of Rs. 92,519.25 crores for the year ended March 31, 2010, posting a growth of 30.5 per cent over Rs. 70,880.95 crores in the previous year. Profit before tax for the year was Rs. 3,522.64 crores compared to a loss before tax of Rs. 2,129.25 crores. Profit after tax was Rs. 2,571.06 crores, a significant turnaround from a loss of Rs. 2,505.25 crores in the previous year.
The consolidated financial performance is not comparable to the previous year on account of the acquisition of Jaguar Land Rover in June 2008.
The company has reported a basic earnings per share (EPS) of Rs. 48.64 in 2009-10 for its consolidated operations against a loss per share of Rs. 56.88 in 2008-09.
Tata Motors’ gross revenue for 2009-10 was Rs. 38,364.10 crores (Rs. 28,568.21 crores). The revenues (net of excise) at Rs. 35,593.05 crores represented a growth of 38.9 per cent over Rs. 25,629.73 crores in the previous year. PBT for the year is Rs. 2,829.54 crores, an increase of 179.1 per cent over Rs. 1,013.76 crores. PAT for the year is Rs. 2,240.08 crores, an increase of 123.7 per cent over Rs. 1,001.26 previous last year (after exceptional item of a loss of Rs. 850.86 crores recognized on redemption of preference shares by TML Holdings Pte Ltd., Singapore, a wholly-owned subsidiary of the company).
Volume recovery led by introduction of new products and strong continued growth in the existing portfolio, continued focus on cost efficiencies and price increases undertaken by the company to combat strengthening commodity prices aided it to grow realizations and deliver double-digit operating margin of 11.74 per cent. Operating profit (EBITDA) was Rs. 4,178.28 crores (Rs. 1,752.44 crores).
Overall economic recovery and a benign liquidity environment along with Government stimulus has driven domestic demand revival during the current year. In the domestic market, commercial vehicles sales increased by 41 per cent to 373,842 units, leading to a market share of 64.2 per cent, up from 63.8 per cent of last year. The growth was well supported by both the medium and heavy commercial vehicles and light commercial vehicles, which grew by 36.5 per cent and 44.4 per cent respectively.
During the year, Tata Motors launched and started sales of the Prima range of globally benchmarked heavy trucks. A number of variants from the Ace family were also introduced. Passenger vehicles, including Fiat and Jaguar and Land Rover vehicles distributed in India, grew by 25.3 per cent in the domestic market to 260,020 units. The market share for Tata passenger vehicles for the period stood at 12.4 per cent.
The company also launched the new Indigo Manza and the Sumo Grande MK II during the second half of the year, which improved the company’s market position in the second half.
The company also ramped up production of the Nano at the Uttarakhand plant, and delivered 30,763 units of the car model during the year. Along with Fiat, the company has a joint market share of 13.7 per cent in the industry.
The Board of Directors of Tata Motors has recommended a dividend of Rs. 15 per ordinary share and Rs. 15.50 per ‘A’ ordinary share each for 2009-10.
Jaguar Land Rover retail sales improved favorably in the second half of the year, after addressing the effects of the global economic turndown and launching new model year products. There was strong recovery in the UK where Land Rover retail sales were up 25 per cent year on year. The Jaguar XF improved in the UK by 28 per cent. China also continued to show significant growth for JLR with Jaguar growing by 38 per cent and Land Rover 55 per cent year on year.
Commercial vehicles
After a sharp decline in sales volume in 2008-09, the commercial vehicle industry recovered with a strong sales growth in 2009-10. Recovery in CV industry was mainly on account of improving economic activity as reflected by improvement in industry production, favourable impact of Government supported stimulus package and overall improvement in the financing environment. Following the severe demand contraction in Q3FY09 triggered by the liquidity crisis and weakness of economic activity, especially in the MHCV category, the auto industry recovered substantially in FY10 and grew robustly at 40.2 per cent over previous year. Robust growth was seen in third and fourth quarter as sales volumes grew at 97.11 per cent and 84.39 per cent y-o-y respectively.
In the recent months, the growth has also been stronger supported by some pre-buying ahead of the expected change in emission norms. Growth in the bus segment has been supported by Government’s increasing focus on JnNURM.
Parallel to the industry, Tata Motors Ltd.’s (TML) commercial vehicle business grew 41 per cent, driven strongly by 43.1 per cent and 55.3 per cent y-o-y growth in the MHCV and LCV bus segment respectively. Strong growth in the MHCV truck segment was due to pick up in growth in the higher tonnage segment. LCV continued to show traction on the back of continued response to Ace truck and its variants. TML gained market share in MHCV segment but lost a marginal market-share in the LCV segment mainly due to loss of market-share in the Ace truck segment on account of new products launched by the competitors which led to expansion of the market.
TML’s market share in the CV segment increased by 40 basis point to 64.2 per cent for the year from 63.8 per cent in 2008-09. Facilitated by recovery in economic growth, availability of finance, easing interest rates and increased freight availability, CV domestic sales volumes increased substantially by 40.9 per cent to 373,842 in FY10 from 265,373 in FY09.
The CVs continued their strong growth and grew by 97.1 per cent and 84.4 per cent in the Q3FY10 and Q4FY10 respectively despite the expiry of the depreciation benefits package in September’09 and partial roll back of the excise duties by 2 per cent during the Union Budget of 2010-11.
An upward trend was witnessed with in the truck market where volumes in the MHCV truck segment increased by 35.9 per cent y-o-y, after a sharp decline of 19.7 per cent in H1, M&HCV; truck market rebounded strongly in H2 and industry sales more than doubled over last year to record a hefty y-o-y growth of 136.3 per cent in H2FY10. Mainly led by following factors: i) y-o-y growth in industrial output improved progressively (16.7 per cent in January 2010, 15.1 per cent in February 2010 and 13.5 per cent in March 2010), which increased freight availability in the system, and boosted freight rates; ii) growth in core sector in general, and cement production in particular, increased; and iii) liquidity in the system improved, accompanied by a drop in interest rates. These factors, together with lowbase in H2 of 2008-09, significantly bolstered overall growth in truck market in second half of the financial year.
The LCV truck segment increased by 45 per cent y-o-y during 2009-10, while the LCV bus segment grew by 46.8 per cent higher than the LCV truck segment.
TML’s volume in the MHCV segment increased by 36.5 per cent during FY10 compared to the previous year. Also, TML’s market share in the MHCV segment increased significantly from 61.9 per cent in FY09 to 63.3 per cent in FY10. TML’s volume in MHCV truck segment increased by 35.4 per cent and in bus segment by 43.1 per cent which was higher than the industry bus segment which grew by 23.5 per cent. Sales to both STUs and Private operators have grown over last year th
ough, as expected. On the back of innovative marketing and product strategies TML substantially improved its market share in MHCV bus market – from 44.3 per cent in 2008-09 to 51.3 per cent in 2009-10.
The LCV passenger carrier market witnessed a market growth of 55.3 per cent in FY10 compared to the corresponding period last year driven primarily by the success of Tata-Marcopolo sales in 7-tonne LCV segment, Ace Magic and Winger (4-tonne segment). Tata Motors’ market share in LCV passenger carrier segment increased substantially from 77.6 per cent in FY09 to 82.1 per cent in FY10.
Towards the end of 2009-10 there was some tightening of liquidity, as also an increase in diesel price; however it has not yet had a perceptible impact on demand for commercial vehicles. In the expanding CV market, launch of new vehicles and inventive marketing strategies have enabled the company to strengthen its presence, and increase its market share from 63.8 per cent in 2008-09 to 64.2 per cent in 2009-10. In the commercial vehicle segment pre-buying was witnessed in Q4FY10 in anticipation of the change in emission norms effective from April’10.
Going forward TML plans to launch newer variants of the Ace platforms and new vehicles will be rolled out of the newly established World Truck platform.
Tata Daewoo
Tata Daewoo Commercial Vehicles Company (TDCV), the company’s subsidiary based in South Korea, continued to see improvement in domestic demand while exports came under pressure, resulting in overall sales declining four per cent over the previous year. TDCV’s volumes declined by 4.03 per cent in FY10 and stood at 8,769 units. However, in Q4FY10 volumes increased substantially by 65 per cent over Q4FY09 on the back of good exports recovery.
