Tata Motors Passenger Vehicles (500570) Q4 02/03 earnings summary

Executive summary

• Turnaround restored profitability: pre-tax profit was Rs.510.37 crore vs a Rs.109.21 crore loss in FY2001-02, supported by cost cuts, higher volumes, product launches and working-capital management.

• Net sales and income from operations reached a record Rs.10,837.01 crore, up 21.9% YoY; pre-tax profit improved by more than Rs.1,000 crore over two years.

Financial highlights

• Net sales/income from operations: Rs.10,837.01 crore vs Rs.8,891.95 crore; operating profit: Rs.1,139.41 crore vs Rs.741.46 crore.

• Profit before tax was Rs.510.37 crore vs a loss of Rs.109.21 crore; profit after tax was Rs.300.11 crore vs a loss of Rs.53.73 crore.

• Consolidated turnover was Rs.11,444.32 crore vs Rs.9,322.20 crore; consolidated profit for the year was Rs.297.12 crore vs a loss of Rs.107.19 crore.

• Cash generated from operations was Rs.1,320.57 crore vs Rs.856.87 crore.

• Recommended dividend: Rs.4 per ordinary share; prior-year dividend was nil.

Outlook and guidance

• Expected FY2003-04 performance improvement: 7%-8%, supported by infrastructure activity, lower interest rates, vehicle-finance availability and reduced passenger-car excise duty.

• Planned Rs.1,500 crore of capital and product-development spending over three years for commercial vehicles and passenger cars; plans included up to Rs.500 crore of expensive-debt prepayment over 12 months.

• A new range of commercial vehicles was under development for introduction in India and overseas within three years; further Indica, Sumo and Safari versions were also planned over that period.

• Indigo estate and higher-power Indica variants were planned; the Indigo estate was targeted for FY2003-04.