Tata Motors Passenger Vehicles (500570) Q4 96/97 earnings summary

Executive summary

• Fourth consecutive year of record sales, production and profits; revenue reached Rs. 10,128.43 crore and profit after tax Rs. 762.36 crore in FY1996-97.

• Vehicle sales rose 19% to 215,261 despite softer second-half demand; commercial vehicles remained the largest business, while the Sumo gained share in the multi-utility segment.

Financial highlights

• Sales and other income rose 29% YoY to Rs. 10,128.43 crore; profit before tax was Rs. 1,000.46 crore, up 32%, and profit after tax was Rs. 762.36 crore, up 44%.

• Depreciation increased to Rs. 209.24 crore from Rs. 164.44 crore; interest expense rose to Rs. 215.04 crore from Rs. 160.78 crore.

• Proposed dividend of Rs. 8 per Rs. 10 ordinary share, versus Rs. 6 in FY1995-96; total dividend including tax was Rs. 220.67 crore.

Outlook and guidance

• Small-car launch planned for FY1998-99; prototype and petrol/diesel engine development progressed, with Chikhali production facilities nearing completion.

• Pune capacity expansion, subject to conversion of the government Letter of Intent to an Industrial Licence, would lift capacity at Pimpri and Chikhali to 400,000 vehicles from 120,000.

• Safari launch and higher-volume production of an upgraded 40-tonne Cummins-powered truck planned for the current year; management expected lower interest rates and overseas funding to contain interest cost.

• Construction-equipment sales were expected to rise as infrastructure investment gained government emphasis; backhoe loader and 60-tonne excavator launches were planned for the current year.