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India's Tata Motors profits slump on weak China sales
[MUMBAI] India's largest car maker Tata Motors reported a near 50 per cent dive in quarterly profits on Friday due to a slump in sales of its luxury British unit in China.
Consolidated net profit for the three months to June fell to 27.69 billion rupees (US$432.66 million) from 53.98 billion rupees a year ago, a drop of 48.70 per cent, the Mumbai-based company said.
That was well below the expectations of analysts surveyed by Bloomberg who had predicted that the firm, part of Tata's sprawling tea-to-steel conglomerate, would report profits of 31.4 billion rupees.
It marked the company's second consecutive large fall in quarterly profits following a 56 per cent slump announced in May.
The latest fall was "primarily driven by weak China sales (of Jaguar Land Rover JLR)," Tata Motors president and chief financial officer C Ramakrishnan told reporters.
JLR shifted only half the number of luxury cars that it sold in the same period last year, Ramakrishnan said.
A sales increase in India helped stem the slide in profits, the company said in a statement.
Consolidated revenue slid 5.57 per cent to 610.20 billion rupees (US$9.53 billion) from 646.83 billion rupees, while revenue from JLR fell to 5 billion pounds (US$7.76 billion) from 5.35 billion pounds.
In India, the firm earned 8.05 billion rupees in the quarter to June, lower than last year due to a rise in costs to 1.17 billion rupees (US$174.59 million) from 945 million rupees a year ago.
Tata Motors is hugely reliant on revenues from JLR, which it bought for US$2.3 billion from Ford in 2008 at the height of the global financial crisis.