Tata Motors (TMCV) Q4 07/08 earnings summary

Executive summary

• Record FY08 sales of 585,649 vehicles, up 0.9% YoY; gross revenue reached Rs 33,093.93 crore, while input costs and financing constraints pressured margins.

• Nano’s January 2008 unveiling and the June 2, 2008 JLR acquisition marked major strategic milestones; JLR’s purchase closed after FY08 year-end.

Financial highlights

• Standalone net revenue rose 4.6% to Rs 28,730.82 crore; operating profit fell to Rs 3,092.32 crore from Rs 3,312.37 crore.

• Standalone PBT was Rs 2,576.47 crore, up 0.1%; PAT rose 6.1% to Rs 2,028.92 crore, mainly on lower tax provision.

• Consolidated revenue, net of excise, increased 10.2% to Rs 35,651.48 crore; PBT was Rs 3,086.29 crore and profit for the year Rs 2,167.70 crore, versus Rs 2,169.99 crore.

• Standalone dividend recommended at Rs 15/share, unchanged YoY; basic EPS increased 5.8% to Rs 52.64, while diluted EPS was Rs 48.28.

Outlook and guidance

• FY09 expected to bring pressure on vehicle volumes and margins from inflation, higher fuel and input costs, tight credit, rising rates, and foreign-exchange volatility.

• Planned launches include the next-generation Indica, Nano, and additional M&HCV and LCV products; Singur Nano production was expected in calendar Q4 2008.

• Marketing, stronger in-house vehicle finance, and cost-reduction initiatives were planned to support market share and partly offset material-cost increases.

• JLR integration and acquisition costs were identified as additional priorities alongside Singur completion and domestic product launches.