Tata Motors Improves Q1 Profit by 58 Percent

Things are going pretty well for Tata Motors, in spite of voices hinting that 2009 will be also a difficult year for the auto sector. The Indian manufacturer which owns Jaguar Land Rover reported a net profit increase for the first quarter of the year of 58 percent, according to a report by Reuters. Specifically, the company posted a net profit of 5.14 billion rupees (approximately $107 million) in the first quarter, compared to 3.26 billion rupees in the previous year.

As for revenues, the company posted a drop of 8 percent to 64.05 billion rupees from 69.28 billion one year ago. Total expenditure also decreased by 10.7 percent to 59.17 billion rupees which increased operating margins to 11.4 percent from 7.1 percent in the year before, according to the aforementioned source.

"The company's continued focus on cost efficiencies, coupled with reduction of raw material prices, inventory reduction and improvement in sales realization yielded considerable benefits," Tata said in a statement.

Tata Motors reported a 14 percent drop in the fiscal year that ended on March 31, with sales of the company falling from 582,390 in 2008 to 498,581 units, excluding figures belonging to Jaguar and Land Rover. India was the company's best selling market, despite that global sales fell 18 percent to 111,257 units. Tata Motors' largest export markets are Spain, Italy, Turkey, Russia and South Africa.

"The meltdown in financial markets around the world impacted India, particularly in the last three months of 2008," Debasis Ray, Tata Motors spokesman, told Automotive News Europe. "We expect 2009 to be a challenging year."