India's Tata Motors posts 8.3% quarterly profit rise on higher demand

[NEW DELHI] Tata Motors reported an 8.3 per cent increase in quarterly profit on Wednesday (Aug 12), aided by demand from infrastructure, logistics and freight customers, which helped counter an uptick in commodity costs.

The results come hours after Tata Sons’ chairman N Chandrasekaran said that he will not seek reappointment at the end of his term amid concerns over insufficient support from the holding company’s board.

The automaker reported a profit of 15.28 billion rupees (US$160.3 million) for the April to June quarter, compared with 14.11 billion rupees a year earlier.

Commercial vehicle demand during the quarter remained resilient, aided by higher freight availability, infrastructure projects, and growth in e-commerce led logistics. This rise in demand eased cost pressures stemming from rising raw material prices triggered by the Middle East conflict.

Rising sales coupled with price hikes undertaken during this period helped ease pressure, with core profitability margins declining only by 60 basis points to 11.7 per cent.

Tata Motors reported an 23.3 per cent rise in total revenue from operations to 193.3 billion rupees in the three months ended June 30.

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The company saw domestic volumes rise by 26 per cent from the year-ago period, abating concerns around rising fuel costs affecting demand. REUTERS